This consultancy helps large schools plan and deliver their net-zero ambitions. Previously, its clients had been in the private sector, but it was now shifting toward longer-term, government-funded contracts. The change promised greater stability and scale, but with government contracts typically taking longer to procure there was a short-term gap in working capital.
Additionally, the company is a subsidiary of a larger organisation. Financing a subsidiary often requires underwriters to evaluate both the financial health of the subsidiary and its parent company. This not only takes time but can also limit the lending options available.
With approximately £1.5 million in annual revenue and healthy profitability, the business was in good shape. But it needed flexible working capital to continue growing while waiting for slow-moving public sector contracts to convert.
It was critical that the loan facility offered low interest rates and low monthly repayments, as well as early repayment options. The goal was to invest in delivery capacity without overcommitting.
We arranged an unsecured loan of £300,000 over five years at around 1% interest per month. It had no penalties for early repayment.
Most lenders we approached wanted to secure the loan against company assets and required a personal guarantee.
However, we found that offering security didn’t give a significant benefit to our client, and that the personal guarantee alone de-risked the loan enough for the lender to unlock access at an acceptable interest rate.
The terms and conditions attached to the loan provided the flexibility and affordability the client needed to maintain cash flow while executing their growth plans.
With the funding in place, more staff could be hired and be ready to go as soon as the new government contracts were finalised. The client was extremely satisfied with the outcome and was fully equipped to deliver its next phase of growth.
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25 Green Street London W1K 7AX
Risecap Ltd Data Protection Number ZA553906. The registered address is 85 Great Portland Street, London, England, W1W 7LT. Risecap is a credit broker and not a lender.
Copyright © 2022 Risecap. All rights reserved.
