Growth Capital

Company Overview

Our client is an owner managed business which operates in the construction sector, and has established a strong reputation for quality of service and technical expertise.

As a result of this turnover has more than doubled in recent years through sustainable new client relationships and an expansion of work with existing clients.

As capacity has increased to service these new contracts the business has been able to pitch for more and more work, creating a proven growth strategy for the future.

Deal Overview

A substantial increase in revenues often brings a requirement for capital to fund both capability increases and working capital, and our clients incumbent funder had not been supportive of this despite the business never having had anything more than modest borrowings up to, and through most of, the period of growth.

Recognising that access to additional funding could unlock further growth, but believing the feedback from more traditional lenders that their businesses was in a difficult sector and therefore more funding wasn’t available, they had used cash reserves carefully and managed the speed of expansion accordingly.

Funding Solution

Whilst it’s true that many traditional lenders struggle with the construction sector there are many specialists who understand the risks more clearly and have products which are far more flexible.

Our client had assets which could be taken as security, and strong cashflows that could service unsecured debt if required.

We did a full analysis of the financials and suggested a number of distinct structures, including asset finance, ABL and a mix of ABL/cashflow term loan.

Ultimately the client met a number of supportive lenders and made a selection based on suitability of structure, the relationship built through the process and the approach to future support.

Once again the process proved that lender approach and attitude is as important, often more so, than simple terms. Our client now has a long term partner who understands the busienss and is looking to support further growth, whilst also retaining their incumbent bank to provide day to day service so minimising disruption.

Company Name: Undisclosed

Lender: Praetura Commercial Finance

Funding Purpose: Growth Capital

Our client has demonstrated hugely impressive growth through a period that hasn’t been the easiest for the construction sector. Where some lenders approach based on sector wide views we were able to introduce a number of specialist funders who met with the business and immediately saw the quality of both the client base and management team. They now have a facility that will grow with their revenues, with additional capacity for wider corporate transactions if required.

Oliver Reece, MD of Fresh Thinking Advisory

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