- Client: Multi-location leisure business
- Funding Requirement: Above £800k
- Product: Merchant Cash Advance
- Timeframe: 48 hours
Enness was approached by a fast-growing leisure business that had found itself under short-term cash flow pressure after making significant capital expenditure commitments as part of its wider expansion strategy. The business had also been let down by a previous cash flow funder, leaving it with limited immediate liquidity at an important point in its growth.
Alongside its normal operating costs, the business was facing a substantial tax liability. Both commitments needed to be met to keep the business operating effectively, but the client had just 48 hours to raise the required funding. The speed of the request meant that a conventional lending process was unlikely to provide a workable solution.
Rather than simply looking for another traditional cash flow facility, Enness stepped back to consider how the business generated its revenue and what type of funding could realistically be arranged within the available timeframe.
Merchant Cash Advance (MCA) emerged as a suitable option. Unlike conventional term lending, an MCA provides an advance against future card revenues, with repayment taken as an agreed percentage of future card transactions. This creates a flexible repayment structure: repayments reduce when trading is quieter and increase as revenues rise.
The technology behind the facility was also particularly relevant to the client's circumstances. The application process could be completed using the business’s existing accounting and banking information, allowing the lender to assess the business quickly. Enness was able to secure a credit-backed offer within 24 hours, giving the client a viable route to raising the required funds within the wider 48-hour deadline.
The facility provided the business with the liquidity needed to address its immediate commitments while avoiding a situation where the outstanding tax liability could have resulted in an arrangement with HMRC. It also meant the business could continue focusing on its wider growth strategy rather than allowing a short-term cash flow issue to disrupt its operations.
This case highlights why the most appropriate form of business finance is not always a traditional loan. For businesses with strong card revenues and an urgent requirement for working capital, an MCA facility can provide a flexible alternative where the repayment profile is linked to trading performance.
Enness’ broad lender network and product-agnostic approach allowed us to focus on the underlying business rather than trying to fit the client into a predetermined lending product. If your business requires rapid access to working capital for an upcoming tax payment, operational commitment or time-sensitive opportunity, speak to a mortgage specialist to discuss your options.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, business assessment and lender criteria. Terms and availability will vary depending on individual circumstances, business performance and the proposed facility.
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.
