- Loan Amount: Circa £1.5 million
- Location: London, UK
- Facility: Interest-only revolving credit facility
Enness was approached by a London-based business that was looking to restructure its existing borrowing. The company had accumulated a number of asset finance agreements over time, and the combined monthly repayments were putting increasing pressure on its cash flow.
The business had also faced a challenging trading period following wider market disruption, including the impact of COVID-19. With a significant proportion of its available working capital being used to service existing asset finance, the company wanted to find a more manageable structure that would reduce its monthly outgoings and give the business greater flexibility.
Enness reviewed the existing facilities and looked at how the different elements of the company’s borrowing could be consolidated. The objective was to create a structure that reduced the immediate pressure on cash flow without restricting the business’s ability to access funding when required.
We negotiated a circa £1.5 million interest-only revolving credit facility, secured against the business’s assets. The facility allowed the company to consolidate its existing asset finance into a single, more flexible arrangement, reducing the level of its monthly repayments.
The revolving structure also gave the business greater control over how and when it used the facility. Rather than maintaining several separate finance agreements, the company had a more streamlined borrowing arrangement that could be managed alongside its ongoing working capital requirements.
Restructuring the existing debt gave the business additional breathing room and allowed it to retain more cash within the company. This provided greater flexibility as the business worked through the challenges it had faced and considered its next stage of growth.
The case highlights how working capital finance can form part of a wider business debt restructuring strategy. Where multiple finance agreements are placing pressure on monthly cash flow, reviewing the overall structure rather than each facility in isolation can sometimes identify a more suitable solution.
Enness also provides corporate finance solutions for businesses looking to restructure existing borrowing, raise additional capital or manage changing funding requirements. The right structure will depend on the business, its assets, existing debt and future plans.
If your business is managing multiple finance facilities and looking to improve the structure of its borrowing, speak to a corporate finance specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or accounting advice. Finance is subject to status, underwriting, security and lender criteria. Terms and availability will vary depending on individual circumstances and the financial position of the business.
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.
