A UK-based wholesale trade business approached us for working capital support. The business was profitable and growing but under strain from multiple short-term loans with high monthly repayments. This was limiting cash flow and preventing reinvestment.
Initially, the client asked for a new working capital facility. However, adding further borrowing would not have addressed the underlying issue: unsustainable monthly repayments. Instead, we explored refinancing options, ultimately consolidating the existing loans into a single, structured facility using the government-backed Growth Guarantee Scheme (GGS).
How the Growth Guarantee Scheme Works
The GGS is a government initiative designed to help UK businesses access finance. It provides a partial guarantee to lenders, which reduces their risk and can enable them to offer facilities they may not otherwise provide. Borrowers remain fully responsible for repayment, the guarantee benefits the lender, not the borrower.
The Solution
Through the scheme, we helped the client refinance approximately £2 million of existing borrowings into a single facility. Key features included:
- A term of around six years
- Interest rate aligned with market conditions at the time
- Security provided via a debenture and a limited personal guarantee (covering around 30% of the facility)
Outcomes for the Client
- Simplification: Multiple loans were consolidated into one, making repayment more manageable.
- Cash flow improvement: Monthly outgoings reduced to a sustainable level, supporting day-to-day operations.
- Reduced personal guarantee: The client’s personal exposure was significantly lowered compared with their previous facilities.
- Greater predictability: A structured repayment profile gave the business more stability to plan for growth.
Important Information
- Businesses remain responsible for repaying 100% of facilities arranged under the Growth Guarantee Scheme.
- Failure to meet repayments may affect your business credit rating and could put any security provided at risk.
- Eligibility for the scheme depends on lender assessment and scheme rules; not all businesses will qualify.
- Terms, rates and fees will vary depending on circumstances.
This case highlights the value of taking a strategic view of debt rather than layering on additional borrowing. By restructuring under the GGS, the client achieved a more sustainable position and reduced reliance on personal guarantees.
If your business is facing similar pressures, our team can explore whether a refinancing or debt consolidation strategy may 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.
