Case Study 4

This was a company in the South East who commissioned and serviced Automatic Gates and Barriers. They were about three years old, had been growing consistently at over 25% per annum, and were in danger of over-trading.

Design: Net Communications

Hosting: Consult-X Limited

Assignment Brief
To help develop the Business Plan, ascertain funding required and raise the agreed funding. The Directors had no funds or assets to provide security as they were fully pledged in the business already.

The Assignment
The Business Plan was drafted and detailed budgets were done revealing a final funding figure of £100,000. Our intention was to fund the whole of this under the Small Firms Loan Guarantee Scheme however the Bank indicated that they would be looking for either a personal committment from the Director/Shareholders of £20,000 or an equivalent sum from a Private Investor. The Investor was found and following detailed discussions and the usual "due diligence", HSBC agreed to support the company with a further £80,000. The Bank then put the scheme to the DTI for sanction.

The Outcome
A combination of £20,000 Private Equity Funding and £80,000 unsecured loan raised using the Governmentís Small Firms Loan Guarantee Scheme through HSBC. The loan was agreed over a term of 5 years fixed at a rate of 2.5% over Base plus the 1.5% DTI premium, and a drawn down in three tranches. We also negotiated an initial 24 month repayment holiday to ease the clients cashflow in the early stages of the business.