CASE STUDIES

Case Studies
Overdraft 
Funding
Electronics Company T/O £3-4m, profitable and traditionally cash rich
Hired large team from a competitor
Projections showed possible need for funding while team bedded in
Required £500K in case of need facility for 12 months
Incumbent bank only interested in utilising directors' personal property as security 
I.F. facility not suitable due to project/stage payments
P2P overdraft facility arranged for £500K
Initial 12 month term - can be drawn on and repaid as cashflow dictates. 
3-4 weeks to set up
Security: First Debenture, No PGs required in this instance
Costs: Interest rate 9.0%, charged only when used; 0.4% usage fee (only in months that facility is used); Set up fee 4.0%
Four months in, company had not drawn on the facility, but had the comfort of knowing it was there if required

Development Finance
Established small developer wanted to buy site within existing housing estate and build nine new homes
Banks not interested - deemed 'speculative'
Funding arranged to buy the site and build out 
£750K overall facility. 70% LTV site purchase; 70% funding of WIP - drawn in tranches
Monitored via QS reports and Ludgate site visits
Costs: Interest rate 14%; Set up fee 5.0%. No exit fees
50% repayment from each plot sale 
Site fully sold before completion and facility fully repaid ahead of time
Subsequent loan arranged to develop 2-unit infill site. Completed and repaid
Presently arranging £1.4m facility to buy and develop 19-unit site

MBI
Funding
HVAC contractor, T/O £11m, EDITDA £750K
Retirement sale. Experienced buyer, but only small personal cash input. Total purchase price £2.4m.
Funded by £1.2m 5-year cashflow loan. Balance funded by vendor loan notes
Loan split £650K fully amortising; £650K interest only. I/O portion to be funded by planned sale of non-core division within 2 years
Security: First debenture; unsupported PG
Cost: Interest rate 12%; Setup fee 4.0%. No early repayment fees

MBO
Funding
Buy-Out by incumbent MD of yacht manufacturer. Simultaneous acquisition of the assets of a competitor
Accounts had been 'written for tax'; Ludgate engaged specialist FD to reconstitute to show true underlying profitability
Projections showed strong EBITDA going forward due to planned operational changes and sales increases
Purchase funded by MD contribution, vendor loan and a debt facility of £620K, fully amortising over 5 years
Security: First debenture, unsupported PGs
Cost: Interest rate 10.5%, Set up fee 6.0%. No early repayment fees

Acquisition
Finance
IFA practice driving 'buy & build' strategy to acquire and integrate other practices
Nine acquisitions to date funded by P2P loans
Security: First debenture to capture trail income, plus unsupported PGs
Current proposal to refinance to another P2P lender for £1.5m with further acquisition funding to follow

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