£2.5M equity release for successful business expansion

Key figures:

Company: £11m

Rate: 6%

5 years: Half interest-only and half repayment

 

The situation:

An existing client came to me as they were looking to raise equity to buy out a minority shareholder in their business and raise capital for further expansion.

 

What was the business?

It was a very successful Education and Specialist schooling business operating in South London.

 

Who was the client?

The client was a UK borrower who had worked with Enness on previous projects and trusted our expertise.

 

What were they looking for?

They had planned on selling the company about a year ago for £11m, but pulled out after deciding to proceed with the business for a few more years to try and expand it further.

 

Why was this case difficult?

There was no reliable security as it was not an asset lend, it was a loan backed by the success of my client’s business. Understandably, most lenders would not feel comfortable with these circumstances.

 

What was the process?

I knew a lender that specialised in funding businesses looking to grow. After liaising with my contact there and discussing my client’s background and requirements, we were able to come to an agreement.

 

The solution:

We secured £2.5m for them on an unsecured basis with a lender really keen to work with entrepreneurs and growing businesses.

This allowed them to buy out a 10% shareholder and retain full control with the remaining £1.4m to go towards cashflow and capital expenditure to grow the business.

 

For more information, or if you would like to discuss your own business finance requirements, please get in touch on +44(0)2037589393 or email us at [email protected]