The Client
An online retailer of luxury homewares was growing strongly. But as sales boomed, the business needed to purchase ever larger volumes of stock to keep up with demand. And that was a problem.
The Challenge
The company had funded much of its growth with business loans whenever more stock was needed. While this approach helped fuel expansion, it left the business with £700,000 of debt. The average interest rate on those loans was nearly 15 per cent.
As the business continued to grow, it became clear that it needed a more efficient and scalable funding model.
Our Approach
After being introduced to the Managing Director, we carried out a detailed review of the business, including:
- Existing borrowing and funding costs
- Stock purchasing cycles
- Supplier relationships
- Import and shipping lead times
- Inventory holding periods
- Working capital requirements
- Future growth plans
Instead of repeatedly taking out new loans, we recommended the business set up a trade finance facility specially designed to support ongoing stock purchases.
The Solution
We arranged a £500,000 trade finance facility that can grow alongside the business.
At the same time, we refinanced around £700,000 of existing debt, securing funding at just 2.61 per cent over base rate, less than half the interest it had been paying on the original loans.
The Outcome
The business now has a funding structure that better supports both day-to-day operations and future growth.
Highlights
- £500,000 trade finance facility introduced
- £700,000 of existing debt refinanced
- Significantly lower borrowing costs
- Improved cash flow and working capital management
- A scalable funding solution to support continued growth
By replacing expensive business loans with a tailored finance facility and lower-cost refinancing, the company is now in a much stronger position to continue its growth.
