Key Details:
- Circa £3.2M total facility
- Multi-asset structure combining receivables, inventory and term lending
- Designed to reduce reliance on supplier credit
- Structured to support bulk purchasing and future growth
Rapid growth can place pressure on working capital even when a business is performing well. A UK company with annual turnover of approximately £8M approached Enness Global after increasing demand highlighted the limitations of its existing funding arrangements. Although sales continued to grow, a significant proportion of working capital remained tied up in inventory, while the timing difference between supplier payments and customer receipts created ongoing pressure on cash flow.
Traditional funding solutions were unable to provide the level of flexibility the business required. Standard term loans and overdrafts typically placed little value on inventory as a funding asset, leaving the company reliant on supplier credit and short-term borrowing. This restricted purchasing power and limited the ability to secure stock on the most favourable commercial terms.
To address these challenges, Enness proposed a bespoke asset-based lending (ABL) facility of approximately £3.2M, subject to lender assessment and approval. The proposed structure combined a receivables finance line of around £1.8M, inventory finance of approximately £1.0M and a £400k term loan, enabling funding to be supported by multiple areas of the balance sheet rather than a single asset class.
By combining receivables and inventory funding within one facility, the proposed structure was designed to improve working capital flexibility while reducing reliance on supplier credit. The additional liquidity could support larger purchasing volumes, strengthen supplier negotiations and provide funding capacity that could grow alongside the business as trading expanded.
This case highlights how asset-based lending can provide a more flexible funding solution for businesses with significant working capital tied up in stock and receivables. Where conventional lending does not fully reflect the strength of a company's balance sheet, a multi-asset funding structure may provide greater flexibility, subject to lender criteria and individual business circumstances.
Disclaimer
This case study is provided for illustrative purposes only and does not constitute financial, legal, tax or accounting advice. Some examples may be based on client enquiries or indicative lending terms and do not necessarily represent completed transactions. Enness Global acts as a broker and not as a lender. All lending is subject to status, underwriting, valuation and lender approval. Loan terms, pricing and facility structures vary depending on individual circumstances, business performance and market conditions. Independent professional advice should be sought before entering into any financial arrangement.
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.
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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.
