- Client: UK-Based Wholesale Trade Business
- Facility: Circa £2M
- Term: Circa 6 Years
- Structure: Growth Guarantee Scheme
A UK-based wholesale trade business approached Enness seeking additional working capital to support its continued growth. Although the business was profitable, its cash flow was being constrained by multiple short-term borrowing facilities carrying high monthly repayments. This was limiting the funds available for day-to-day operations and preventing the business from reinvesting effectively.
The initial requirement was for a new working capital facility. However, Enness identified that simply adding further borrowing would not address the underlying pressure on the business. The more effective approach was to restructure the existing debt and reduce the monthly repayment burden.
Enness therefore explored refinancing and debt consolidation options, ultimately identifying a solution through the government-backed Growth Guarantee Scheme (GGS). The scheme provides a partial guarantee to participating lenders, which can support lending to eligible UK businesses. Importantly, the guarantee is provided for the benefit of the lender, while the borrower remains responsible for repaying the full amount of the facility.
Through the scheme, Enness helped the client refinance approximately £2M of existing borrowing into a single structured facility with a term of around six years. The facility was arranged at a rate aligned with market conditions at the time and was supported by security in the form of a debenture and a limited personal guarantee covering approximately 30% of the facility.
Consolidating the existing borrowing into a single facility simplified the business's debt structure and reduced its monthly financial commitments to a more sustainable level. This improved cash flow provided greater flexibility for the business to manage its ongoing operational requirements and reinvest in future growth.
The restructuring also provided greater predictability through a longer-term repayment profile, allowing the business to plan its finances with more certainty rather than managing several short-term facilities with higher monthly outgoings.
This case demonstrates the importance of assessing the underlying reason for a business's funding requirement rather than simply adding further borrowing. By considering refinancing and debt consolidation alongside the Growth Guarantee Scheme, Enness was able to structure a facility designed around the client's existing obligations and longer-term objectives.
Businesses remain responsible for repaying the full amount of any facility arranged under the Growth Guarantee Scheme. Eligibility is subject to lender assessment and applicable scheme criteria, while rates, fees and security requirements will vary depending on the circumstances.
If your business is facing pressure from multiple borrowing facilities or requires additional working capital, speak to a finance specialist to explore whether refinancing or debt consolidation could be appropriate.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
