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In the competitive construction industry, securing adequate funding is often a significant hurdle. A London-based scaffolding company faced this challenge head-on when traditional asset finance options fell short of their £364,000 funding requirement.
Read how Millbrook's innovative financial solutions successfully obtained the required finance so the business could deliver its scaffolding projects in Canary Wharf.
Client Background
London-Based Scaffolding Firm Seeks Substantial Funding for Expansion
A London-based scaffolding business sought funding to acquire scaffolding equipment. Initially, the company was approved £50,000 through asset and equipment finance but required an additional £364,000 to fully implement its strategic plans for the year.
The Challenge
Securing £364k Amid Lender Hesitation
The client had secured a variety of scaffolding contracts within Canary Wharf, but required substantial funding for the additional scaffolding equipment to complete the work. Funding the equipment posed challenges, as many asset finance companies are hesitant to lend against scaffolding equipment, such as; scaffolding boards and poles to build scaffolding towers. The client's required funding amount exceeded typical asset finance offerings.
Lloyd Blanks, a business finance specialist, then began exploring alternative business finance solutions to achieve the client's goals.
The Solution
Leveraging the Growth Guarantee Scheme and a Unsecured Business Loan for Optimal Funding
The Growth Guarantee Scheme (GGS) emerged as a more cost-effective solution, enabling the client to secure higher funding amounts for his equipment. Similar to its predecessor, the Recovery Loan Scheme (RLS), as a government-backed lending initiative, GGS reduces lender risk, facilitating access to necessary capital.
The funding was structured as follows:
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Growth Guarantee Scheme Loan: £165,000
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Unsecured Business Loan: £199,000
Benefits of the Growth Guarantee Scheme:
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Government-Backed Assurance: Provides lenders with a 70% government-backed guarantee, reducing their risk exposure.
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Flexible Financing Options: Supports various financial products, including equipment, machinery, vehicles, debt consolidation, and invoice finance.
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Accessible Funding: Offers facility sizes from £10,000 up to £2 million, accommodating substantial business investments.
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Delegated Decision-Making: Lending decisions are fully delegated to accredited lenders, streamlining the approval process.
An unsecured business loan is a financing option that allows businesses to obtain funds without the need to provide collateral. This type of loan is particularly advantageous for companies that may not have significant assets or prefer not to risk them. In this case, the client secured an unsecured business loan of £199,000 to support their financial needs.
Benefits of Unsecured Business Loans:
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No Collateral Required: Businesses can access funds without pledging assets, reducing the risk of asset forfeiture in case of default.
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Faster Approval Process: Without the need for asset appraisal, unsecured loans often have quicker approval and funding times.
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Flexible Repayment Terms: Lenders may offer adaptable repayment schedules to suit the business's cash flow.
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Preservation of Asset Ownership: Companies retain ownership of their assets, which can be crucial for operational purposes.
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Simplified Application Procedure: The absence of collateral requirements can lead to a more straightforward and less cumbersome application process.
The Impact
Completing Major Projects in London's Canary Wharf
With the secured funding, the scaffolding business successfully financed and completed multiple commercial projects in London, including significant developments in Canary Wharf. This financial support enabled the company to execute its strategic initiatives effectively.
Summary
Strategic Financing Fuels Scaffolding Company's Expansion and Project Success
The Growth Guarantee Scheme provided a viable and advantageous financing solution for the scaffolding business, addressing funding challenges and facilitating the successful completion of key projects.
If you'd like to receive further information about the Growth Guarantee Scheme (GGS), please contact Millbrook Business Finance to speak with a business finance broker. You can also read more about business finance in our comprehensive 'Everything You Need to Know About Business Finance' guide, or start your funding journey by checking your eligibility below.
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