- Borrower: UK online retailer in the FMCG sector
- Financing Requirement: £2m
- Purpose: Purchase additional high-demand stock
- Facility: Unsecured loan at 8% + Bank of England base rate, with no personal guarantee required
Enness was approached by a UK-based online retailer operating in the FMCG sector that was looking to raise additional finance to take advantage of strong demand for certain products. The business had identified an opportunity to purchase additional stock but did not have sufficient liquidity available to maximise the opportunity. The client therefore wanted to explore whether an unsecured loan could provide the required funding.
The company’s strong financial position meant that unsecured lending was a possibility, although lenders would typically look to introduce additional protections when providing finance without security. Personal guarantees are common in this type of transaction, which presented a further challenge in this case. The company’s main shareholder was based in India, creating a multi-jurisdictional element that could make some lenders more cautious when assessing the application.
Enness identified a lender that was prepared to consider the transaction without requiring a personal guarantee. To achieve this, we presented the lender with a detailed overview of the company’s financial position, including its projected cash flow and the additional profits the business expected to generate from purchasing more stock. This helped demonstrate the underlying strength of the business and the commercial rationale for the proposed borrowing.
We successfully secured the client a £2m unsecured loan without a personal guarantee. The facility was negotiated at a rate of 8% plus Bank of England base rate, providing the business with the liquidity it needed to increase its stock holdings and respond to the strong demand it was experiencing.
This case demonstrates how working capital finance can provide businesses with access to liquidity when a time-sensitive opportunity arises. Unsecured business finance can be particularly useful where a company has a strong financial position but does not want to provide security or personal guarantees, although availability will depend on the lender, business performance and wider circumstances.
Enness works with a broad network of lenders to source bespoke working capital solutions for businesses with complex or unusual financing requirements. To discuss your requirements, speak to a mortgage specialist.
Risk Warning:
Business finance carries risks. If the business is unable to meet the agreed repayments, the lender may take action in accordance with the terms of the facility. Interest costs can also increase where a facility is linked to a variable base rate.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting and lender criteria. Terms and availability will vary depending on individual circumstances. Enness does not provide legal, tax or investment advice, and lender introductions are unregulated.
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.
