We were approached by an IFA who needed a loan for £600,000 to acquire an existing Financial Planning practice.
The acquired business was to be fully incorporated into the existing Wealth Management business and there would be significant synergy of staff and skills.
The client firm already ran a profitable practice and although we suggested that either he or ourselves could approach a high street lender we were told speed was of the essence.
The client had already approached a previous broker who had put together a quite competent package of lending for £275,000 with a “coalition of the willing”; a series of asset finance providers working together, but when we worked out what they were charging the client, as a blended overall cost of finance it was over 14% APR over terms of 36 to 60 months.
We structured a deal from a single provider instead, while it didn’t quite get to the same level (£450,000) but at a rate of 8.05% APR fully over 60 months, this enabled the client to negotiate with the vendor a higher level of deferred consideration (with the balance in 12 months) and so these funds proved to be enough.
From application to approval took one working day, due to the client timing his purchase with the vendor it then took a further two weeks, and the money was in the client’s account.
With this particular lender we can loan up to £500,000 and so when the client has to pay the balance of purchase in 12 months’ time then of course we are well placed to also provide that finance.
