Structuring Optimal Financing for Business Growth

Chris Ray • 25 July 2024

In the ever-evolving world of corporate finance, structuring deals that foster business growth while maintaining financial stability is paramount. Recently, our team at Branta had the privilege of working on a significant project under the new Growth Guarantee Scheme, which showcases the strategic approaches we employ to support our clients' ambitious growth plans.

Working with Industry Leaders

We were delighted to collaborate with Matt West at Allica Bank on this project, focusing on securing financing for a dynamic pair of entrepreneurs aiming to expand their business portfolio. Leveraging the latest Growth Guarantee Scheme, we structured a deal that allowed these entrepreneurs to gear up against an unencumbered company within their group, ensuring they had the capital needed for their next acquisition without hindering future growth opportunities.


Strategic Deal Structure

One of the critical elements of this deal was ensuring that the financing structure did not impede future growth. By taking security over one of the trading arms instead of the entire group, we provided the necessary financial support while leaving room for further expansion. This approach is a testament to our commitment to creating flexible and sustainable financing solutions tailored to our clients' unique needs.


Tailoring Security Arrangements

In traditional financing, lenders often seek security over the entire group to mitigate risk. However, this can stifle growth by restricting the business's ability to leverage other assets for future opportunities. At Branta, we understand the importance of balancing risk with flexibility. By securing the loan against a single trading arm, we safeguarded the lender’s interests while preserving the group’s broader asset base for future ventures.


Minimising Operational Disruption

Securing financing can often be a disruptive process, especially when multiple entities within a group are involved. Our approach focused on minimising this disruption by isolating the security to one trading arm. This allowed the rest of the group to continue operations smoothly, maintaining focus on their core activities without the administrative burden and operational constraints typically associated with more extensive security arrangements.


Future-Proofing Financial Strategy

Our clients are forward-thinking entrepreneurs with a keen eye on future growth. The strategic deal structure we implemented ensured that their current financing did not become a roadblock for future opportunities. By not encumbering the entire group, we kept their financial options open, enabling them to seek additional financing or enter new ventures without being over-leveraged.


Enhancing Credibility with Lenders

A well-structured deal not only benefits the borrowing company but also enhances its credibility with lenders. Our thorough risk assessment and strategic structuring demonstrated to lenders that the clients were a low-risk venture. This increased their confidence in the clients’ ability to manage and repay the loan, potentially opening doors for more favourable terms and conditions in future financings.


Case-by-Case Approach

At Branta, we don’t believe in one-size-fits-all solutions. Each business has unique needs, and our deal structuring reflects that. For this project, we meticulously analysed the client’s entire portfolio, identified the optimal trading arm for security, and crafted a bespoke financing plan. This tailored approach ensures that our clients receive the most advantageous terms, fostering growth while maintaining financial health.


Entrepreneurial Excellence

The entrepreneurs behind this venture are distinguished by their impressive CVs and a proven track record of successfully integrating new businesses into their broader portfolio. Their strong financials and deep understanding of how we assess deal structures made the approval process smoother and more efficient. This synergy between the client's capabilities and our strategic financing solutions is what drives successful outcomes.


Swift and Efficient Process

Thanks to the concerted efforts of our team and our partners, we managed to secure credit approval in a remarkably short period – just five working days. This rapid turnaround was crucial in enabling our clients to move forward with their acquisition plans without delay. Our streamlined processes and collaborative approach play a significant role in achieving such swift approvals.


Exploring Financing Options

Throughout the project, we explored various financing methods to ensure the best possible structure for our client. Ultimately, the chosen approach under the Growth Guarantee Scheme provided the optimal balance of risk and opportunity, aligning perfectly with our client's strategic objectives.


Self-Test Questions

  1. How can your business structure its financing to ensure ongoing growth without over-leveraging?
  2. What are the benefits of securing financing against specific assets or trading arms rather than your entire company?
  3. How can a proven track record and strong financials facilitate smoother financing approvals?
  4. What steps can your business take to achieve swift credit approval for urgent financing needs?


Conclusion

At Branta, we pride ourselves on our ability to craft bespoke financing solutions that support our clients' growth ambitions while safeguarding their financial stability. This project is a prime example of how we blend strategic thinking with practical execution to deliver exceptional results. If you're next project requires our assistance, don't hesitate to make contact.




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