Case Overview – Unsecured Business Loan
We were approached by an accountant who needed a loan for £500,000 to acquire the goodwill of an existing accounting practice.
This would allow a significant synergy of staff and skills and the acquired business was to be fully incorporated into the existing accountancy business.
The client already ran a profitable accountancy practice and although we suggested that either he or ourselves could approach a high street lender we were told speed was of the essence.
The client had already approached a previous broker who had put together a quite competent package of lending for £275,000 with a “coalition of the willing”; a series of asset finance providers working together, but when we worked out what they were charging the client as a blended overall cost of finance it was over 14% APR over terms of 36 to 60 months.
We structured a deal from a single provider instead that didn’t quite get to the same level (£250,000) but at a rate of 8.05% APR fully over 60 months, this enabled the client to negotiate with the vendor a higher level of deferred consideration (with the balance in 12 months) and so these funds proved to be enough.
From application to approval took 1 working day but in the main due to the client timing his purchase with the vendor it then took a further 2 weeks but at the end of this 2 weeks the money was in the clients account.
To win the business from the other broker the fee structure was minimised to a £4k earn but as an example of how to take business away from the competition who had, by our calculations, put in over £10k of fees into their proposal this shows solidly the speed of unsecured business lending.
In addition – with this lender we can loan up to £500,000 and so when the client has to pay the balance of purchase in 12 months’ time then of course we are well placed to also provide that finance and of course …. earn further commission.