- Business: Restaurant in Central London
- Facility: Revolving VAT Reclaim Bridge Facility
- Facility Limit: £1 million per quarter
- Use of Funds: Working capital and CapEx
Enness was approached by a restaurant business preparing to begin trading from newly occupied commercial premises in Central London. The business had a strong business plan and an experienced track record behind it, but had not yet built up a trading history from the new premises.
This created an immediate funding challenge. With the business yet to begin trading, traditional bank lending was unlikely to provide the speed or flexibility required. At the same time, the business needed additional working capital to support its early-stage requirements and planned capital expenditure.
Enness looked for a solution that could provide funding quickly while allowing the business to access capital as its VAT position developed. We negotiated a revolving VAT reclaim facility with a limit of up to £1 million per quarter, providing the business with a flexible source of working capital.
The structure allowed the business to draw against eligible VAT reclaims and reuse the facility as required, giving it greater flexibility as the commercial property investment progressed. Funds could be drawn within as little as 12 hours of a request, while the entire process from initial engagement through to the first drawdown was completed in under two weeks.
The speed of the facility was particularly important given that the restaurant was preparing to launch from new premises. Rather than waiting for a conventional trading history to develop before accessing finance, the business was able to use the facility to support its immediate working capital and CapEx requirements.
Alongside arranging the funding, Enness reviewed the client’s wider commercial property and insurance arrangements. This broader approach helped identify potential cost efficiencies and ensured the business had considered the different areas of its financial structure before commencing trading.
This case demonstrates how specialist short-term finance can provide an alternative for businesses that have strong plans and experience but limited trading history. A revolving structure can also provide greater flexibility than a conventional term loan, particularly where funding requirements are expected to develop alongside a new commercial operation.
Enness works across both commercial property and corporate finance, allowing us to consider the wider requirements of a business when structuring finance. If you are launching, expanding or investing in a commercial operation and need flexible working capital, speak to a corporate finance specialist to discuss your options.
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 and lender criteria. Terms and availability will vary depending on individual circumstances, the proposed transaction and the facility structure.
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