A very interesting deal came our way at Praetura recently. One that showcased just how much of an ‘asset’ our industry can be to SMEs.
One of our partner brokers, XL Finance, got in touch having received a call in response to a refinance eshot he’d sent to prospective clients. The call came from someone whose accountant had recommended they seek specialist advise.
The client wasn’t one company, it was two (two well-established mining and quarrying companies), who were looking to join forces to buy-out and take-over a competitor. This would increase their market share within the industry and enable both companies to grow. In order to make this happen, they needed to raise in excess of £3 million.
It is at this point that XL Finance got in touch with Praetura, because of the reputation we’re proud to have built over the years for the specialist expertise we offer, particularly with refinance deals
The first step was to find out more, so both our Sales Director and Credit Director went to visit the owners of the two businesses that were looking to raise the funds together. This wasn’t just to find out what they were looking to do ‘right now’, but to understand their history, how they were looking to work together moving forward and what their future plans and aspirations were.
The deal was going to be far from straight-forward, but without wanting to blow our own trumpet, that’s what we’re good at, and that’s why Praetura took the role of lead funder; sourcing the syndicated partners, liaising with FRP Advisory and negotiating with all parties to ensure everything was in place at the correct time, to allow the sale and take-over to go through.
“Praetura aren’t just a funder, they’re an adviser, a co-ordinator and an extensive source of knowledge and expertise. They are a valuable asset in themselves and I’m proud to work in partnership with them.”
Mark Redman, XL Business Finance
The syndicated deal was a combination of both asset and invoice finance worth £3.2 million.
Focusing on the PAF portion in particular, through a refinance deal of more than 30 assets, £1.6 million was raised.
The refinance of both encumbered and unencumbered assets was specifically structured in such a way as to raise the amount of cash required, without increasing the company’s monthly outgoings.
So that’s £1.6 million raised, with no initial outlay needed, no additional risk incurred, no loss of equipment or productivity and no increase in the monthly outgoings of the company being taken over. What other funding channel could offer you that?
In our opinion, this is just another example of the massive difference that all of us working in our industry can make. Trying to raise £3.2 million through traditional lending channels would have been no easy feat. But because we take the time to understand, to configure, to offer more flexible options and structure deals in different ways, the alternative finance channels are able to say yes more often. We just need to keep banging the drum to make sure as many SMEs as possible are aware that these funding routes are available to them.
If you would like to find out more, or want to discuss ways to promote asset refinance to your client base, please don’t hesitate to get in touch with the experts at Praetura Asset Finance – we’re more than happy to help, in any way we can!