Business Funding: Invoice Discounting, Asset Finance and Unsecured Business Loan
Location – Birmingham
Finance Amount: £550,000
Background
The client was put in contact with us at Pinnacle Business Finance as they were looking to purchase a steel fabricating business based in the Midlands. They had been speaking to the business broker and identified this Steel Fabricator as a business they wanted to buy. However, they were unsure how to finance the business acquisition as they had never bought a business before. The business was well established, and the owner was looking to retire therefore wanted to sell. It has been independently valued and now the client was looking to purchase it through a leveraged buyout.
Solution
When we spoke to the client who was looking to buy the business, they advised they had had senior positions in similar businesses before. In addition to this, they had capital to put into the deal themselves, all be it a smaller amount. This meant we could draw on their experience of running similar businesses before along with making a financial commitment. After initially discussing the Steel Fabricating business in question at length, we reviewed the financial performance.
We quickly identified we could utilise invoice finance and asset finance to leverage against so, the purchaser could raise enough capital to reach the day 1 payment. Invoice discounting was implemented on a confidential basis along with financing against the machinery held in the factory. Once the cash-flow forecast showed how the repayments would be hit based on future projections along with historic performance we were able to put forward a funding application to acquire the business for our client.
We compared various invoice finance companies along with asset finance companies to ensure the client was getting the best finance possible. We managed to negotiate a funding package through an ABL (Asset Backed Lender) who could provide all the funding in one place.
The client therefore successfully bought the business and after 12 months had enough profit within the business to repay themselves from the funding, they originally put in.