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No Room For The Little Treasures!!

“No room for the little treasures!!”

100% funding to help the expansion of a children’s day nursery

This is the third in a series of blogs, where I’m telling the stories behind some of the recent deals we’ve done.

They will give you an insight into the types of funding we can arrange, and also help you understand exactly how we’ve assisted some of our clients get business finance.

This week, we’re looking at a children’s day nursery. The business was growing fast and had reached maximum capacity. In other words, there was no more room for the little treasures!!

The good news was our client had found a new property she wanted to acquire. However, she needed 100% funding and had struggled to get the finance she needed. Could we help?

So, 100% funding required to help a children’s day nursery to expand and grow. Here’s how we helped…….

The Background To The Deal.

  • Our client had run a very successful children’s day nursery in South London for over seven years.
  • She ran the business from two units and had total registration for 87 children between the ages of three months and five years.
  • In addition to the two units, she had also established a head office function, designed to support the ongoing expansion of the business.
  • Our client was now at full capacity and to continue growing needed to acquire another property.
  • She had identified a new property, which when up and running would provide a further 45 places taking overall registration up to over 130 children.
  • Because all her cash was tied up in the business, our client needed to raise 100% funding to both acquire the new unit and to also carry out an extensive program of refurbishment prior to opening.
  • Because our client was looking for 100% funding for the new acquisition, her existing lender declined to assist.
  • However, she felt the new property was too good an opportunity to miss.
  • That’s when the client’s IFA put her in contact with ourselves

What Were The Problems?

There were several problems, but to summarise:

  • Our client’s business had grown rapidly but had now simply run out of space in the existing two units.
  • She had been looking for new premises for some months without success. So, when these new premises became available our client was keen to move ahead as quickly as possible.
  • So, she approached her own bank and asked them for funding to buy the new premises, and also provide additional funds to carry out a complete program of refurbishment.
  • The problem? Our client needed 100% of the purchase price and 100% of the refurbishment costs.
  • Her banks response? A flat NO!

How Did We Solve the Problems?

  • The first thing we did was meet our client. We call this meeting our DEEP DIVE EVALUATION and is arguably the most important thing we do.
  • During that initial meeting we take the time to completely understand our clients funding requirements and as a result suggest possible solutions.
  • We were immediately struck by our clients drive and enthusiasm as well as her business acumen.
  • In discussing her deal, we looked at all the possible options.
  • As a result, we suggested a complete restructuring of her existing loans, utilising the equity in one of her existing properties, and as a result raising the 100% funding she needed to acquire and refurbish the new property.
  • With our clients agreement we approached one of our lenders for a total loan of £1,250,000.

What Were The Benefits To Our Client?

  • Our client was very disappointed with the attitude of her own bank. She felt they should have been helping her, instead of which she felt they were constraining her growth.
  • As a result, with our help, we carried out a complete re-structuring of her existing funding arrangements whilst also providing the total amount of funding she needed to buy and renovate the new premises.
  • In agreeing the loan of £1.25 million, our lenders also agreed to offer the first 12 months on an interest only basis.
  • This was important, as it allowed our client the time she needed to refurbish the new unit prior to opening.
  • The business has now gone to another level, with our client and her staff now looking after a total of 130 children under the age of 5!!!

In Summary

  • Even successful businesses don’t always have cash available at the exact moment they need it.
  • When this happens, they are often turned down for finance by their own banks.
  • This is when having alternative funding options becomes important.
  • On this deal, we looked at the “big picture”, and were able to carry out a total financial restructuring, releasing equity from one of our clients existing properties so that we could raise the 100% funding she needed.

Result? One very happy client!!