We were approached by a successful and fast-growing UK business supplying raw materials into the engineering sector. Wanting to expand their horizons, they were looking into moving into new markets overseas.
Having seen phenomenal growth over the past few years to £10.4m, the business was looking to invest in a new plant in the Far East. It was hoped that this would act as a springboard into the Asia Pacific region. The business originally approached their bank to help fund this expansion and were introduced to the bank’s invoice finance department who made an offer of a facility.
The client was then introduced to us by their accountant, so that we could obtain a marketplace comparison on the terms they had been offered.
The Client was then introduced to Oakmead Finance by their accountant to obtain a market place comparison on the terms they had been offered.
Our head of asset-based lending met with the client to discuss the growth strategy and their requirements. As a result of this, it soon became apparent that the invoice finance facility would have provided a short term solution, but alone it would not have provided sufficient working capital to meet their funding requirements and further the business’ trade cycle.
The financial director was aware of this and said the management were going to inject further cash themselves when it was required. Rather than investing more money, we suggested that they look to raise additional working capital against their inventory. This would enable them to meet their funding requirements and provide them with sufficient headroom.
By having established relationships with a number of asset-based lending providers, we helped structure a £2.5m invoice finance facility against their receivables and an additional £1m facility against their inventory.
The additional funding has enabled the business to successfully open their Far East operations, they have continued this growth by expanding into the south-east Asian and Pacific region, all without the need for further directors’ loans.
“It was refreshing to deal with a firm which has the experience and knowledge to challenge our business plans and make well a structured proposal on how we may do things better, rather than just giving us what we thought we wanted. We are now in a far better place than we might have been thanks to Oakmead Finance