Trading for: 3 years
Sector: Promotional merchandise & events DJ
Location: Exmouth, Devon
Reason for funding
Working capital due to long payment terms
- Unsecured business loan
- Fixed repayments
- £15,000 over 12 months
- Improved cash flow whilst awaiting customer payment
Small businesses make up the backbone of the UK economy, yet a growing number are turned away from the big banks when trying to access the funding they need to survive. In particular, businesses specialising in short-term projects or goods manufacturing are finding it increasingly difficult to access the working capital they need to bridge the gap between producing goods and receiving payment from clients.
Stewart MacLeod, Managing Director of Spinback Productions found himself in a similar position when he accepted a major project to provide hospitality gifts for the 2019 concert series at Wembley Stadium.
The nature of Stewart’s business means that he provides bespoke hospitality gifts and merchandising for projects on a contract-by-contract basis. With goods produced in the Far East, Stewart relies on profits from previous projects to pay the initial deposits to the factory and get the goods into production. Once the goods are ready, Stewart pays the balance to release the goods and ship them over to the UK. However, he could then be waiting several weeks before the goods are delivered to the client and the invoice is fulfilled.
As one can expect, this type of project work results in huge lead times, meaning that from brief to delivery Stewart can be out of pocket for around 10 weeks per project. Working capital is therefore paramount to the running of Stewart’s business and his ability to take on project after project.
Securing funding to bridge the gap
To secure the working capital Stewart needed to fulfil the Club Wembley merchandising project, he initially approached his bank for a small business loan. As many small businesses experience, he was turned down due to not having any tangible assets to offset the loan against. This left Stewart in a difficult position, as the very nature of his business means he’s producing bespoke goods to order, so there's a constant turn around of assets and no merchandising equipment or products to offset the loan against.
Traditional lenders also required order books and detailed projections, but Spinback’s order books for each project only last a couple of months. With each project varying in size, it was difficult to provide lenders with the 12-month forecasts they needed. Overall, Stewart found that the metrics traditional finance providers use to underwrite their loans didn’t take into account the nature of his small business, and the banks weren’t able to buy into his goals and vision for Spinback.
How Fleximize helped
Many small businesses in the merchandise production or manufacturing industry fall at this hurdle because they find themselves unable to finance the final release of the products and the delivery of the goods to the customer. Fortunately, Stewart turned to a financial broker who introduced him to a couple of alternative finance lenders who specialize in unsecured business loans, one of which was Fleximize. Thanks to Fleximize’s unique lending criteria, and the fact that its underwriting process doesn’t use the same metrics as traditional banks, the vital working capital Stewart needed to fulfil the project was finally in sight.
Fleximize was able to offer Spinback Productions an unsecured business loan of £15,000 tailored to the unique nature of the business’ merchandising project work. Stewart emphasized how his Relationship Manager Kirsha managed expectations from the very start, and how paying the figure back over a period of 12 months in manageable chunks gave the business the breathing space it needed. Crucially, the money was in Stewart’s account just two days after he began the application process, and the funds allowed him to fulfil his contract with Club Wembley for the upcoming 2019 concert series which includes the likes of P!nk, Fleetwood Mac and the Spice Girls.
At Fleximize, we love being able to help small businesses grow and prosper. If you run a small business and are looking for working capital to fulfil a specific project, drop us a call on 020 7100 0110, and our team will be happy to answer any questions you may have. Or, if you're ready to start your application process, simply click the button below.