Easing Money Worries by Refinancing £1.2m Children’s Nursery Loan
If your loan is causing problems with cash flow, refinancing may be able to resolve issues and even unlock new options for growing your business. When a children’s nursery owner felt trapped by a restrictive loan, we were happy to help.
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A well-respected children’s nursery owner was struggling to grow the business despite a positive reputation and active client base. Their challenge was all based on an existing lender relationship that saw the client overcharged on fees and interest – this was causing a significant impact not only on the business but also on the owner’s quality of life.
Rather than continuing with sleepless nights and struggling forwards, the client approached our team at Rangewell to ask about refinancing. In a typical refinance process, a client will switch to a new lender who essentially purchases their debt from them and then reissues a new agreement.
In this case, the client was hesitant about lending due to their experience – but we wanted to help demonstrate the power of refinancing guided by an expert team like Rangewell acting on your behalf.
Representing your business to refinance more efficiently
Rangewell discussed the client’s current situation with them at length to determine the challenges associated with their current agreement. The loan had been taken out when the business was valued at £1.2m, but it was now worth far more. In addition to losing out on the increased equity, the loan also carried high fees and charges, constantly impeding the business’s cash flow and ability to fund further growth.
The client had already achieved a good Ofsted rating and demonstrated many years of responsible, profitable children’s nursery ownership, representing an increase in value. They had negotiated their existing lender agreement at the start of their ownership career – meaning the deal did not account for the results the nursery had already achieved.
Now that the nursery had grown in value, the client could refinance and leverage their growth to negotiate a better offer. In their case, they had grown tired and frustrated with their current lender, so they asked Rangewell to explore refinancing options with new lenders – though it’s worth noting that you can refinance with your existing lender too.
Rangewell knows the lender’s market inside and out, which means we can quickly identify the right lenders for your needs. In this client’s case, we approached multiple lenders to discuss the increased value of their nursery business and their current situation. We attracted a few different offers and then presented them to the client alongside our recommendations and rationale so they didn’t feel out of their depth.
Securing additional funding via a competitive refinance
Thanks to the client’s strong performance as a nursery owner, with good Ofsted ratings, stable staff retention and a loyal customer base, we generated plenty of interest from lenders.
The client’s nursery was valued at £1.8m, whereas their original loan had been taken on a £1.2m valuation. We were able to negotiate competitive offers and ultimately chose a refinancing agreement that included an additional £50,000 from their new lender. As a result, they could take care of small repairs and refurbishments that had been left incomplete due to the previous restrictive loan.
We were happy to help this owner refinance successfully and solve many problems plaguing their business and personal life. With the new loan, their rate was far more manageable, and the extra £50,000 was used for vital works that help the nursery continue to attract excellent reviews as it grows.
If you’d like to explore refinancing options, contact the team here at Rangewell today.