Expanding a business can be exciting, but it can also create a significant need for additional working capital. This can be particularly challenging in expensive areas such as London, where acquiring additional premises can require substantial investment. An unsecured business loan can provide a flexible option for established businesses looking to fund their growth without putting additional property security in place.
I recently explored this route with a client whose business was in the process of expanding. The company already had premises in central London and had recently purchased another property using £250,000 of borrowing. The client had also reached the limit of their existing business overdraft, meaning there was little scope to increase borrowing through their existing bank or other high-street lenders.
However, the business needed additional funding in the short term to support its cash flow while continuing to expand. The company was performing strongly and the additional premises had been acquired to meet growing demand, but the existing level of borrowing made securing further finance more challenging.
The client therefore approached Enness to explore alternative funding options. Given the purpose of the borrowing, an appropriate working capital loan could provide the additional liquidity required without adding another charge over the company’s property.
OUR SOLUTION
I approached a relatively new lending platform with which Enness had an established relationship, having arranged finance for similar businesses previously. The lender was comfortable considering the company’s wider trading position and the purpose of the borrowing.
Through this lender, I arranged an unsecured business loan of £200,000. This provided the additional capital the business needed without requiring security over the recently acquired premises.
An unsecured facility was particularly suitable in this situation because a business bridging loan secured against the property would have involved additional legal and valuation costs. The unsecured structure therefore provided a more straightforward way of accessing the required funds.
The facility gave the business greater flexibility to manage its cash flow while continuing with its expansion plans. Our established relationship with the lender also helped streamline the process and provided access to a facility without an arrangement fee.
This case demonstrates how specialist business finance can provide alternative funding options when traditional lenders are unable to increase an existing facility. For established businesses with a clear purpose for additional borrowing, an unsecured loan can provide useful flexibility without requiring further property security.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, business suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
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.
