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Helping an optician who had run into deep financial problems: £30,000 refinance
Setting up an optician’s practice from scratch can be daunting. Premises and equipment will involve major costs, and with no established client base, a start-up will always be a venture with a certain amount of risk. However, things may be a little easier for an established optician who is already running a successful high street practice. Setting up a branch can reduce costs compared with starting a new business from scratch - and lenders may be happy to lend when they can see evidence of an existing successful business. But although many opticians choose this route to grow their practice, there are still no guarantees of success. We recently helped an optician find a solution when his new branch practice failed - leaving him with substantial debts, and CCJs which looked as though they would prevent him raising the money he needed to refresh his old business. The Branch Challenge The rewards of running a successful practice can be high - but sadly, not every business venture will succeed. A practice that runs from a single premises can show excellent returns - but there can be no guarantee that the same formula will provide the same success in a branch. When a branch hits problems, it can have a negative effect on the whole practice. We recently helped an optician who had been operating a highly successful practice in a Birmingham suburb since 1983 - but who ran into serious difficulties when he opened a branch practice in a neighbouring town centre. He had arranged a £250,000 funding package from a leading bank to set up his new branch in 2015. “I had a good position on the high street, and I believed I could simply replicate the success I had enjoyed with my first practice.” He would be able to leverage his existing relationships with frame and lens suppliers, and he had looked carefully at the demographics of the area his new branch would be serving. He had also been careful with his equipment, using his experience and contacts to get a good price to equip the consulting room to a high standard. However, when he opened for business, he soon realised that there was a problem. “People were just not coming in. I thought that this would not be a long-term problem and told myself that, once they realised we were there and that we were open, people would start coming in off the street. I thought back to when I launched - that was a struggle at first. But the business has moved on in the last 30 years.” The problem, he realised, was that the major franchised chains were in the area, and that they had the advertising spend to ensure new customers went to them - while many older customers were happy with their existing opticians. “After a year of trading at a loss, I realised that the new business was never going to take off.” He tried to sell the business as a going concern, and at first attracted some interest - although this took several months, while his losses mounted. He secured a low, but workable, offer from another group practice operator but, at the end of a long period of due diligence, the buyer's accountant advised against proceeding with the purchase at the last minute. “Nobody wanted to buy an opticians which had never shown a profit.” He had no alternative but to liquidate - and with a leasehold property, there was very little to recoup from the venture. With his original practice struggling after supporting the branch for almost two years, he was left with £200,000 outstanding from his original £250,000. Is your optician's practice in need of finance? Find the support you need now, or apply for funding today After he had missed a series of payments, he found himself facing a CCJ. This not only obliged him to pay back the loan, it effectively prevented him from borrowing any more money - which he now desperately needed to get his original practice back on track. He turned to us at Rangewell to help. What is a CCJ? A County Court Judgment (CCJ) is a type of court order that might be registered against you if you fail to repay the money you owe. When you owe a creditor money they can apply to the County Court to register a judgement against you to claim it back. The court can issue a judgment which will set out how you will need to repay the debt, which can be as a lump sum or by instalments. Unless you pay off a CCJ in full within 30 days, it will be shown on your credit record and remain there for six years. This can become a major problem. Your credit record is used by lenders when they consider a loan application. A CCJ can be a warning sign of a business in distress and will lower your credit score. So when you apply for any kind of finance, the lender will check for CCJs. Some finance providers will refuse to lend if you have a CCJ against yourself personally, or your company, as they believe it presents a risk that they might not be repaid. How Rangewell helped The brokers that the optician had turned to were unable to help him. At Rangewell, as an independent service, we take an innovative approach to answering our clients' needs - and this means we can often find ways to provide funding when others can’t. There were three factors that would let us help the optician. First, we saw that he had property - his original business premises - which could be used to provide the security for a loan. Secondly, his original practice remained profitable - although it urgently needed reinvestment. And thirdly, we know lenders who specialise in providing solutions for people in CCJs. We found a lender who could provide £300,000 as a secured loan at 7.9% This allowed our client to pay off his debts, and recapitalise his core business - which is already returning to full profitability. At Rangewell, we help opticians - and other business owners - with their funding needs. So if your practice needs help with finding funding, call our Optician Funding Team. Our service is free.
£360,000 International Finance: Invoice Finance and Trade Facility package
Trade has become global. Finding the best price for key supplies can mean doing business with a company in China, Korea or India. This means that UK businesses will often find themselves depending on suppliers on the other side of the world - and that can mean problems with cash tied up on goods in shipment. The traditional approach can involve a pro-forma invoice, negotiating shipping costs, opening a letter of credit at your bank, customs and reams of paperwork - and yet still trigger a cash flow crisis if a large order has to be paid for before the manufacturer will ship it. At Rangewell, we believe in the importance of international business for UK companies. But for many, doing business globally can seem like a headache of complications and bureaucracy. We recently looked at a package of solutions which would provide a total of £360,000 funding to help a business find a better way to fund its importing - and its sales. The Challenge of Importing We were approached by a company that provides a unique niche solution - packaged disposable cutlery and meal kits. They serve clients such as fast food chains and airlines, and provide products that range from basic plastic knives and forks to complete dining utensil sets including special compartmented plates and bowls ready to be filled with food by catering companies serving airlines and other transport clients. Many of the products are supplied with special colours and logos, and - although they can provide standard items - many are specially designed for the end client’s needs. “You can’t just provide a basic and flimsy knife and fork. Our clients want cost-effective solutions - but they don’t want to let their customers think they are getting anything substandard. They will usually want their logo on the items they provide too.” Our client has high manufacturing standards, and has built up relationships with a number of manufacturers in China. But the long lead times involved meant problems with cashflow. “Even with a repeat order, we have to wait weeks for a production run to be scheduled and a consignment shipped. We have to pay upfront to get an order produced and that means we have cash tied up for 6 to 8 weeks before what we need reaches the UK. Then we have another wait before our clients pay us.” Issues such as shipping times and different approaches to credit across different markets can create long delays between placing an order and delivery being made. This can create a major financial hole that many importing businesses struggle to fill. We looked at the solutions available - and realised that the client actually needed two types of funding. Trade Facility The first solution was an International Trade Facility - a type of funding provided by a bank, which can call on an international network, giving it a local presence with suppliers around the world. We found an international bank that could arrange locally-available funding for an order with a supplier, and would allow that order to be manufactured and shipped with no payment required form our client. This type of funding is ideal when dealing with orders from around the world, and is usually repaid when goods reach the business ordering the items in the UK. “With Trade Finance, we didn’t have to fund an order and wait months until the goods arrived. The bank took care of all the details for us.” In this case, our client needed an additional line of funding - which would provide credit until their customers paid for the goods. Invoice Discounting Our second solution was an Invoice Discounting agreement, which would allow our client to receive payment as soon as they had shipped an order to their customers and issued an invoice. This type of funding provides prompt payment. Even when a customer took weeks or months to pay our client, the funding provider would ensure that they could receive payment as soon as a consignment was shipped on the strength of the invoice issued. This would allow our client to pay off their Trade Finance, and provide additional cash to reflect the profit they would make on the order. “With Invoice Finance, we get a cash advance as soon as we issue an invoice.” We found an Invoice Finance specialist which could offer the most appropriate arrangement. There are many providers offering Invoice Finance, and several banks and other bodies offer Trade Finance. But being able to arrange both types of finance, and to dovetail them together into a complete funding package, demands specialist help. At Rangewell, we can provide the specialist help you need. Whether you’re looking to ease cashflow with an appropriate Invoice Finance agreement, or need to make your importing costs more streamlined, we can help tailor a finance package to your business’ needs.
£250,000 Asset Funding for less than the leading lender in the field
Equipping a dental surgery is costly - and the costs are rising. The traditional high-cost items, chairs and drills, have been joined by dental lasers, digital x-rays and photography. Practices need to offer them to remain competitive - and to offer clients the highest standards of care. The high costs mean that finding the most cost-effective way to provide this growing list of equipment can be essential for the financial success of a practice. Asset Funding solutions - including Hire Purchase and leases - can be the most cost-effective way to provide this equipment, and have become standard in the industry. Asset Finance covers a number of financial solutions, which can be used in a number of ways. For example, many dentists use Hire Purchase to spread the repayments for high value items over up to five years. This can be ideal for high-ticket equipment that will go on giving service for many years. The alternative is to use lease agreements to avoid capital expenditure altogether. This may be more suitable for technology items which will quickly become obsolete, and which will need to be replaced when an alternative becomes available. Asset Funding is particularly effective because it allows loans or leases to be secured on the asset or equipment itself. This means that lenders have the right to take the asset if payments are not maintained - but, on the plus side, they can reduce costs compared with conventional business loans. However, there are many Asset Funding providers in the market, and the difference between the lowest and highest rates offered can be substantial. Getting the right Asset Finance deal for the equipment a practice depends on can be vital to keep costs down. Looking to grow or re-equip your dental surgery? A percentage can make a big difference to your repayments. Find out more about funding for the dental sector or apply for finance today The Challenge A Bradford dentist recently approached us to arrange £250,000 worth of Asset Funding. He already had a funding provider in place which he had worked with for years, but he was concerned that the deal he had been offered might not be as competitive as it appeared. Getting the most appropriate and cost-effective deal was vital. He was embarking on a programme of growth, with an entire second chair to equip. He realised that shaving a few percentage points off the rates required for a Hire Purchase agreement would mean savings for his practice each month - and that it might be worth shopping around. As a dental professional, he knew that many lenders would be happy to lend to his business. But he also knew that finding the most competitive deal across the entire market takes time and contacts which he did not have. He turned to us at Rangewell as experts in business funding to help him find the deal he was looking for - a deal which might save him money compared with his current Asset Finance provider. Saving the practice money He was astonished to find that we could arrange the Asset Finance he needed at rates a full 2% less than his current provider - meaning that his business could save hundreds of pounds in the course of a year. The savings were very worthwhile, and came as a very pleasant surprise to the dentist. He had believed that, because he had been working with a leading Asset Finance provider with a good reputation in the sector, he would automatically be offered the best rates. We were able to show him what was possible by spreading the net wider, and using our expertise to negotiate a better deal for the funding required. At Rangewell, our expertise works for you. We know the lenders who really understand the profession and who can offer the most competitive rates for all types of finance - including Asset Finance solutions. Coming to Rangewell means getting an expert team working for you and your practice to find the financial answers you need. It means we can help you get the equipment that will provide your practice with a competitive advantage - while reducing the costs you pay. Our client looked at his spending plans, and realised that his current budget could stretch a little further. He was able to add extra modules to his digital imaging system - which would support him in introducing a cosmetic service - whilst still staying within his original budget. To find out more about Asset Finance solutions for dentists for yourself, call our Specialist Dental Practice Finance team or take a look at the potential options available.
Turning a hobby into a business asset: £60,000 funding via sale & leaseback
Cashflow can be a challenge in many sectors - but there are two particular challenges facing the retail sectors. The internet has taken a growing proportion of shoppers, and fierce price competition from supermarkets mean tight margins that make profits thin. These tight margins also mean that keeping a positive cashflow can be difficult, even when there is apparently a good turnover and plenty of customers. We recently helped an offlicence owner raise the funding his business needed with an innovative method. Many small shops are endangered and many small operators are having to find new business models if they are to remain competitive. Many are seeing the potential in changing to a convenience store format. Making the changes required to an existing business to help it adopt and stay viable requires investment which, in turn, requires an injection of capital. Turning to Rangewell for help with funding We were recently approached by the owner of a small chain of grocery shops, which the owner was determined to refit, improve and operate as convenience stores. “There is profit to be made if you stay open and offer what people want - from papers and the lottery to alcohol, tobacco and vapes. But to start earning it, I would need to refit the shops with new displays and bring in new lighting - and, of course, a great deal of new stock. The problem was that I had already borrowed to keep my cash flow positive. The bank did not want to lend me any more.” Naturally, banks set limits on the amount they will lend to a business, and exceeding their tight lending criteria is all too easy. Other lenders do exist who may take a more generous approach, but their lending rates may be substantially higher. The shop owner had been offered a loan of £7,500 - but at 2.5% per month. “Things were getting out of hand. I needed the money to make the changes to the business if I was going to keep my head above water, but there seemed to be no affordable way to borrow the money I needed.” He approached several brokers - including those who specialised in the retail sector. However, after looking at his current borrowing they found that they were unable to secure the funds required. He already had maximised his borrowing on his home and his business premises. He called us at Rangewell for a solution. We always work closely with our clients, and we looked at his accounts with him. We saw that the reluctance of traditional lenders was understandable. He needed a new type of funding if he was to raise the £60,000 he needed. We looked at all his assets and saw an alternative - which could provide the high level of funding he needed - in the form of sale and leaseback of his classic car collection. Are you looking for a cash injection but finding it difficult to find a lender willing to help? Do you have cash tied up in valuable assets? Find out more about Sale and Leaseback or appyly for funding today What is Sale and Leaseback? Sale and leaseback is a transaction in which the owner of a property sells an asset, and then leases it back from the buyer. In this way the transaction functions as a loan, with payments taking the form of rental or lease payments. The main advantages of sale and leaseback are that it lets businesses release cash from existing items of value - usually items such as equipment, plant and machinery. The cash gained can be used for many purposes, including business acquisitions or simply providing extra working capital. In the case of our client, as a shop keeper he had no business assets with sufficient value - but we saw that his personal collection of classic cars, which included 15 Mercedes going back to the 1960s, could offer the means to provide the cash he desperately needed. How we helped A leaseback agreement can be a long-term arrangement that is used by the seller to raise capital by liquidating an asset (i.e. the property) without giving up the asset itself. We have frequently used leaseback agreements for clients in the aviation industry and those with industrial equipment. We simply approached one of the lenders we know who is active in the field who was prepared to write up an arrangement based on the car collection. Our client was able to raise the £60,000 he needed to refit his shops, and to pay the monthly charges which will allow him to keep his cars. At some point in the not too distant future, when his shops have returned to full profitability and his other lending is paid down, he will be able to buy back his collection. At Rangewell, we can help you arrange all types of business funding - and find innovative solutions when other cannot. Call us if you face a funding challenge - we can help you find the answers.
£25,000 to refurbish a B&B: Cutting the costs of hospitality
Worries about global warming, the uncertainty of overseas travel - and costs - have meant that owners of UK holiday accommodation may be enjoying something of a boom. Of course, today’s guests demand high standards. Refurbishment spending in all styles of hotel is up by more than 50% in the past few years. You don’t have to run a 5-star hotel to see the need for fresh, clean and well equipped rooms, along with facilities such as WiFi and well-maintained grounds. At Rangewell, we can help independent operators find the funding they need for their refurbishment plans - and we recently provided a solution for a unique B&B. The Client's Challenge Our client had bought a small pub which had become rather run down when the previous owner had let out the upper floors as bedsits. He saw that the location - close to the edge of the Lake District and in a picturesque village - offered plenty of opportunity for running a B&B. The pub had operated as a hotel in the past, and he knew that there would be no problem getting the necessary planning permission to reinstate the business. The previous owners had not sought to get the proper arrangements for their change of use, which meant that the original planning approvals remained in place. “The chance to stay in a traditional inn close to some of the loveliest scenery in Britain was an obvious draw. I knew we could attract walkers and nature lovers touring the area - and I hoped we might bring in overseas visitors who liked the idea of staying at a historic British pub.” The new owner launched a marketing campaign using the internet to bring in bookings, but he was aware that work would be needed first. The pub itself needed a spruce-up and some new carpets and furniture. The rooms, however, needed complete refurbishment. “Rooms need to provide quality and comfort. They can have older furniture as it can add to the ambience, but they must offer the highest standards of cleanliness and convenience - and be free from wear and tear.” The rooms would need to be stripped out and redecorated to modern standards with ensuite bathrooms. The owner worked out the costs involved and realised that he would need to spend around £25,000. But there were some problems. Although he had experience in the licensed trade, he was new to the hotel business - and he had some problems with his credit history. He wanted to find the most cost-effective way to provide the funding - but with his new owner status and a history of problems with the previous borrowing, he found that it was impossible to arrange additional funding. Are you a hotel or B&B owner looking for finance to refurbish? Find out more about Refurbishment Finance or apply today Why does a bad credit history make new funding difficult? Lenders look at credit records when they are considering a loan application, and a low credit score caused by a less than perfect credit history can spell problems. Lenders will see any problems with a credit score - even from something as simple as a late or missed payment - as evidence that a borrower might present a risk. Despite the fact that the client owned his pub and had a number of other business and property interests, lenders were not prepared to lend. “I had a business that was ready to make real profits but, unless I could arrange the work on my letting rooms, there was little chance that I would get any positive reviews, if I could get any guests to come in the first place.” How Rangewell helped Because of the adverse credit history, the cost of this rescue loan was high at 8% - but it did allow our client to do the work required to bring his premises up to the standard he wanted. The funding Rangewell arranged: £25,000 over 5 years at 8% Monthly £503.58 Total cost of loan £5,214.80 Our client was able to go ahead with his refurbishment plans, and is enjoying steadily growing bookings for his B&B business. At Rangewell, we’re an Access to Finance specialist working with over 350 lenders to offer you an overview of more than 23,000 business finance products. That means, whatever your hotel funding need, a call to us can save you money - and help you make the most of your business plans.
£75,000 cash advance - for an optician
Your optician business is a clinical practice - but you are also a retailer, and retailers face constant worries about cashflow. These worries may also be getting worse with increased competition from supermarkets which are opening optician shops - and the national chains. We recently helped an optician raise additional funding with an innovative arrangement which could provide a lifeline for many other practices currently struggling with high costs and tight profits. It can help provide much-needed investment in your business and there is no need to make any repayments. Your business may make most of its profits through the sale of frames. Your own skills as an ophthalmologist are essential, of course - but the income from examinations is limited. But as you are all too aware, the supermarkets and the large chains, and increasingly online services, are offering low-cost spectacles and even discounted designer frames. Keeping your own prices low while providing a professional service is a constant challenge - which frequently requires investment and an injection of capital. But tight margins mean that profits are small, and there is little spare cash left over to deal with loan repayments. We were recently approached by an optician based in the Northampton area who had excellent turnover in excess of £1 million each year but, which because of tight margins, was facing continuous cashflow worries. The owner had arranged a series of loans to help deal with his cashflow issues and bring in stock - but the repayments were simply making his cashflow problems even worse. He called us at Rangewell for a solution. We always work closely with our clients, and we looked at his accounts with him. We were able to find a lender able to offer a Secured Loan of £25,000 for 7%. This might have dealt with his immediate issues by paying off the existing loans, but it would only provide a short-term solution. Our client would probably need to borrow again in a year or two. Fortunately we knew there was an alternative. A Merchant Cash Advance Fixed monthly repayments are inevitable with a traditional loan. A Merchant Cash Advance, or MCA, presents no such problem. They can be ideal for any business that receives a high proportion of their takings from card payments - and provide funds without the need to make regular repayments - or indeed repayments of any kind. With an MCA, the provider works with the card payment processing company and may offer a cash advance equal to your monthly card takings. They will then take a percentage of every card transaction made to the business until the cash advance, and their fees, are paid off. The advance is paid back automatically as customers make card payments. Instead of causing problems with a fixed drain on your cashflow, the MCA will keep pace with the level of business that you do. It means your customers repay your cash advance for you - and the more business you do and the more customers pay by card, the faster the advance is paid off. Like most professionals in the optician sector, our client was taking an increasing proportion of payments by card. This made it simple to provide an advance of £75,000. It meant that he could pay off his existing debts, and have a reserve to call on when cashflow was causing problems. How we helped With the increased use of payment cards, there are now many lenders providing MCA funding in the UK. Their fees and the percentages they take to fund repayment will differ. Getting the agreement that is right for your practice is essential to keep costs down. We found the MCA provider who understood the optician sector and who was prepared to offer the most attractive fee structures to our client. We helped him make the necessary arrangements - which brought his business the funds it so vitally needed in a matter of days. At Rangewell we can help you arrange all types of business funding - including MCA arrangements. Call us if you face a funding challenge - we can help you find the answers.
£280,000 property refinance: the advantages of buying with cash
As an accountant, you will probably have some clients who are cash-rich. Being liquid can be a valuable asset in many sectors. But what can you do if a client wants and needs to be a cash buyer to secure a bargain in the property market where costs are inevitably high - and yet has no cash to call on? At Rangewell, our expertise can help you provide the solution - and both you and your client will benefit as a result. We were recently approached by an accountant who had a number of clients in the residential Buy to Let sector. He had helped them ensure their businesses were on a sound footing, despite the recent changes in taxation, and one of them was keen to expand his property holding. With the help of his accountant, he had built up a business based on a small residential portfolio funded with Buy to Let mortgages, and owned a number of flats and small houses in and around a major northern conurbation. He recognised the opportunity presented by a run-down property near to his existing properties. The property was a small house which had been standing empty. It was in poor condition, and most types of mortgage would be impossible until work was done to make it habitable, with refurbishment necessary to kitchen and bathrooms, and central heating installed. The accountant saw that his client had no cash to call on. "We first looked at a Bridging Loan, which can act as a short-term source of a high-level funding. Bridging Loans are high cost and intended to be repaid quickly, either by the sale of property or by refinancing to another product designed for the long-term, such as a mortgage. My client was keen, but I advised him to be very wary of entering into this type of arrangement without a clear exit route - and turned to Rangewell for help." Working with the accountant to find a solution We worked closely with the accountant and saw that the client’s existing property portfolio could provide the answer. We set about securing a refinance arrangement. In simple terms, any Commercial Mortgage is a loan secured on your property assets. This security means that the risk to the lender is small, and so the interest rate they charge can be reduced. This means that the costs involved with a Commercial Mortgage can be among the lowest cost lending types available. So, to raise cash for virtually any purpose, a Commercial Mortgage can be the most cost-effective solution, especially with the current low interest rates and high property values. Do you have clients with property finance needs? Call us for the solutions your business and clients need In the case of the accountant’s client, we worked with a specialist mortgage lender who could provide a new mortgage for his entire BTL property holding. This was currently mortgaged with a number of lenders but with some of the mortgages having been in place for 10 years, we saw that, thanks to property price inflation, there would be sufficient equity to release to cover the new property. We found a major commercial lender who was able to cover the entire existing portfolio with an interest-only mortgage at just 2% above base rate. Not only would this reduce the client's monthly repayments overall, it would also allow the client to release £280,000 in cash - reflecting the growth in house prices his portfolio had enjoyed. This was more than enough to buy the house he wanted and to fund the work required. The accountant’s client was able to buy the property at a substantial discount thanks to his cash buyer status, and to cover the work required. With a new tenancy now agreed, the property has already begun to bring him in an additional income stream. Do you have clients in need of large-scale finance for buy to let property and other deals? The simple answer is to call us at Rangewell. We have specialist teams working with accountancy professionals such as yourself and we can help you find the solutions your clients need for virtually any financial need. We make no charge to you or your clients. In fact, we can support your efforts with a contribution from any commission that might be generated, and our services are free to you and your clients.
Bridging Finance for a commercial property
Many businesses have wealth tied up in their premises - wealth that could be used to fund expansion or simply to fund business operations. We can help you find solutions to release that wealth - which can provide a cost-effective source of the funding you need. We were recently asked for help by a property owner who was based overseas - but who had substantial business interests in the UK. This can be a difficult situation for funding. Living in the UK and being under UK law is usually a prerequisite for business lenders in order to consider an application. However, we knew that certain types of business funding might still be possible. Our client owned a 7-storey office block in an inner London borough. He had acquired it as part of another property deal, and was keen to use it as a source of profit. He first looked at the possibility of letting it out as a whole, but soon found that the office market was less than buoyant and that there were no organisations in need of a large headquarters building in the area. However, he recognised that there might be some scope to let the building out in parts as a starter hub for small and growing businesses. He looked at the costs involved, and saw that there would be substantial expense required to fit out the building - which was little more than a shell. He received some quotes from organisations which could offer a basic fitting-out with carpets and shared facilities, and which could also offer desks and seating as required. The most competitive quote he could secure was for £400,000. He concluded that this would be reasonable for the kind of return he had projected, and looked at raising the figure as a loan. However, he soon found that because he was based outside the UK most lenders were unable to offer him with a loan. He called us at Rangewell to provide a solution. Using a Bridging Loan We saw the answer would be Property Finance secured on the property itself. We also saw that, although it might be possible to arrange a Commercial Mortgage, the long timescales involved would result in high cost, and a Bridging Loan might offer a better alternative. A Bridging Loan is so-called because it can bridge a short-term funding gap. Bridging Loans are short-term loans secured on property and are usually repaid quickly, either by the sale of the property or paid off with another finance product designed for the long-term, such as a mortgage. Their main use is to offer short-term finance to fund business and property purchases - they can be arranged much more quickly than other forms of property funding such as Commercial Mortgages. However, there is no restriction on how funds can be used. So if you are faced with a sudden unexpected cost, or if you need to raise large-scale finance to take advantage of an opportunity - a Bridging Loan secured on a business or residential property which you already own could provide the funds quickly. Looking at a Bridging Loan to provide large-scale finance quickly? Find out more or apply today Lenders want full details of the directors' personal finances and will expect to see a good credit history. They will also want to confirm the current value of the property. The condition and type of the premises will be important, as will the current market conditions. Versatile properties such as office accommodation may be particularly attractive to some lenders. Because the funding is secured on a UK property asset, lenders may be prepared to overlook the usual requirement for UK residency when considering a loan. Our clients' office property was valued at £2 million and he was happy to use it as the security for a Bridging Loan. We approached a specialist lender who was able to provide the necessary funding. Most types of business finance require monthly loan repayments. These may be made up of both interest and a proportion of the capital, or of interest only. However, there is an alternative with a Bridging Loan, where all interest can be added to the principle. This can be repaid at the end of the loan period, when the property would be suitable for a Commercial Mortgage. This would mean that there were no interim payments to be made. We set up a deal that offered an additional £400,000 for the client - and allowed them to raise the funds they needed at 1% per month - or 12% per year. The funding Rangewell organised: Bridging Loan of £400,000 over 12 months Interest at 12% PA to be rolled up Total repayable on exit from arrangement: £448,000 Our client was able to draw down the funds he needed within a week, and the fit-out work was authorised. The office block has now achieved a good level of occupancy and is recognised as providing an important facility for local enterprises. At Rangewell, we can provide the specialist help you need when you have a Property Finance question. We're here to help, even when others can't.
Have we passed ‘peak beer’?
We have all heard about ‘peak oil’, the moment when petroleum production reaches its highest level, as it starts to be replaced by some other form of energy. But now, industry observers are concerned that we may have already passed ‘peak beer’ and that the tremendous boom that microbreweries have enjoyed in recent years may be at an end. Accountancy and business advisory firm UHY Hacker Young has been looking at the microbrewery sector, and their findings suggest that Britain’s long and phenomenally successful craft beer boom is losing some serious steam. Their research showed that in 2016, 179 new breweries opened. In 2018 that figure rose to an astonishing 395. However, in 2019, the total number of breweries in Britain increased by just 8. On the face of it, this might be taken to suggest that the beer boom is over – but the facts behind the figures might suggest a different story. There are several factors in play that suggest that, while the increase in new brewery openings may have slowed dramatically, the impetus behind the great British real ale revival is as strong as ever. The independents are being snapped up The growing popularity of artisan beer means that global drinks companies have muscled in on the craft brewing sector, buying up several of the most successful ‘artisan’ brands. Major multinationals, like the Budweiser Brewing Group, which rebranded from AB InBev in March, can no longer count on their long-standing industrial approach to beer production to deliver a product with potential for growth. With a crowded market offering no scope for further expansion of their mainstream operations, they have no alternative other than to look for new, niche areas with high growth potential to fuel their revenue and profits. The artisan beer sector is an obvious target. Buying up small brewers and adapting their products for large-scale production (albeit not on the scale of their core brands) can be the simplest way for them to take a share of a lucrative sector. This means that the total numbers of independents is being dragged down, and that the actual number of start-ups may be much higher than the growth indicated. But room for growth is tight But while some brewers are being snapped up, it may be true that it is becoming harder for newcomers to break into the market. The UHY Hacker Young report has, said the greater competition has made it significantly harder for start-ups to break into a crowded market, and more difficult for small and unprofitable brewers to grow their way out of trouble. The market is becoming well served with brands, which means that - although drinkers' thirsts are not in any danger of being slaked - sales growth is going to be harder to come by. It suggests that a more businesslike approach may be the way forward for many small operations which have relied on an informal approach to marketing and other business challenges in the past. In a nutshell – your craft brewery needs a sustainable business model, and you need to become sustainable and profitable at an earlier stage in your development. Looking to start or grow a craft beer business? Need premises or equipment for your microbrewery? Find out how finance can help your microbrewery thrive What does this mean for your business plans? Peak beer may not have arrived yet. The economy, and drinkers disposable incomes, may be under pressure from Brexit uncertainties, and with more young people becoming discerning customers each year, there could be plenty of scope for growth to continue in the near future. However, although there may be plenty of opportunity for the very smallest brewers who supply a handful of bars and a few local retailers, supermarkets have limited shelf space and a slow rotation of brands. It means that small craft brewers will need to innovate and to provide sound business models if they are to be to break into a larger market. The key factor could turn out to be funding. The funding your microbrewery could depend on The challenge for many small breweries may be cashflow. Retailers may be slow in paying, leaving little cash in the pot to fund operations, let alone expansion. Cashflow is a major issue for every small business, and having to wait weeks for invoices to be paid can trigger a cashflow crisis – but there are ways to help. Many clients have found that, with our help, Invoice Finance could provide the answers. With Invoice Finance, a lender will use your invoices as the security for the cash advances you need. So, instead of waiting for your customer to pay, which can be a major headache with large retailers and supermarkets, it can mean getting paid as soon as you have brewed and shipped a batch. You have the funds you need to deal with the overheads - and by ensuring your cash coming in always keeps pace with beer being sent, it can mean you always have the funds you need to support further growth. You simply send a copy of the invoice to the lender as well as your customer. The finance provider will pay you a percentage - usually 85% - right away. They will then collect the full amounts directly from all your customers and send you the remaining balance, less their interest charges and fees. It means outsourcing all the activities of credit control, freeing up your time for brewing. At Rangewell, we work closely with our clients to understand their needs before we recommend a particular type of finance - and Invoice Finance is only one of the funding solutions we can help with. If you are thinking about getting the finance you need to get past your own ‘peak beer’ situation and set up or grow your business, talk to our experts. Our service - and their business finance expertise - is absolutely free.