Case Studies

Funding a business acquisition, CR3

Client’s circumstances

The client owned a successful textile manufacturing company and as part of his growth strategy, was looking for funds to help him acquire a similar company. As part of the acquisition, the client was able to take over an existing contract for materials and products from Southeast Asia, including a shipment that had already been approved and prepared for the new company. However, the sellers had a specific completion date which meant the client needed to move quickly to take advantage of the opportunity. He had attempted to borrow against his main residence, valued at £950,000, which had an existing first charge mortgage of £295,000. However, his existing mortgage lender was unable to provide additional funding against the property in the time-frame required. Due to time sensitivity, the client’s broker contacted us straight away.

MT Finance solution

On receipt of the enquiry, we were able to give an immediate decision and issued the offer in principle that day and as we were faced with roughly 2 weeks to deliver the funds, we immediately instructed the valuation at the same time as going to offer. In just 13 days, MT Finance was able to secure a second charge £275,000 loan on the client’s property, at 60% LTV, based on the current open market value. Interest was retained at 0.85% over 12 months, with no exit fees or early repayment charges. No personal guarantees were required.

The benefits

Our loan meant the client was able to complete the acquisition by the specified completion date and capitalise on a fantastic investment to his business. Within 9 months the client was able to show a trading pattern and increased income that allowed them to raise monies to exit our loan.

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