Case Study 1

A new company set up to provide a computerised stock control system on a bureau basis to the pub, club and hostelry market. The Directors/Shareholder had spent 2 years researching and developing the products and service.

Design: Net Communications

Hosting: Consult-X Limited

Assignment Brief
To develop the Business Plan, ascertain funding required and raise the agreed funding. None of the Directors/Shareholders had any funds or assets to provide security. The Funds would therefore have to be raised by a combination of Private Equity and unsecured borrowing.

The Assignment
The detailed budgets were reviewed and revised and the final funding requirement agreed at £120,000. An existing contact of the Directors agreed to formalise and increase his existing support to the tune of £40,000. Negotiations were opened with several Banks to find agreement to support the company using the Small Firms Loan Guarantee Scheme, following detailed discussions and the usual "due diligence" NatWest Bank agreed to support the company and put the scheme to the DTI for sanction.

The Outcome
A combination of £40,000 Private Equity Funding and £80,000 unsecured loan raised used the Government's Small Firms Loan Guarantee Scheme through National Westminster Bank. The loan was agreed over a term of 5 years fixed at a rate of 9% with a 0.5% guarantee premium and a 6 month repayment holiday drawn down in 2 tranches of £40k each.