A UK private security firm secured £150,000 in growth finance through Fleximize, with the full loan amount paid directly into the company’s bank account. The business chose a three-year term after considering additional 12- and 24-month offers.
The client had received offers elsewhere, but on this occasion the £0 upfront lender fee and the option to make overpayments or settle early helped Fleximize’s offer stand out. SME Finance Hub broker Jodi supported the client throughout, while Mia at Fleximize helped with the online sign-up process.
The funds were paid out within 48 hours of the client accepting the offer. That is the timing achieved in this individual case, not a promise or typical turnaround for other applicants.
The funding requirement
The private security firm was looking to raise capital to support business growth. It needed a funding arrangement that would provide a sizeable injection of capital while giving the business some choice over the repayment term and the ability to reduce borrowing costs by repaying ahead of schedule.
SME Finance Hub considered options through its specialist lender panel and supported the client in reviewing the available terms. Fleximize provided offers over 12, 24 and 36 months, giving the business a choice of repayment periods. After considering the options, the client selected the three-year term.
The Fleximize loan: key details
- Lender: Fleximize
- Funding amount: £150,000
- Purpose: Capital to support business growth
- Term selected: Three years
- Other terms offered: 12 months and 24 months
- Interest: Fixed monthly interest rate
- Funds paid: The full loan amount was paid directly into the client’s bank account
- Personal guarantees: Provided by two shareholder/directors
- Early repayment and overpayments: Available under the offer terms
The fixed monthly interest rate gave the business a defined rate for the agreed facility. However, the rate alone does not show the full cost of borrowing. The client should consider the total amount repayable over the selected term, alongside the monthly repayment and the effect of the commitment on business cash flow.
Why the offer suited the client
The client had received offers from other providers, so the decision involved looking at more than just the headline loan amount. On this occasion, two features of the Fleximize offer were particularly important: there was no upfront lender fee, and the client could make overpayments or settle the loan early.
There were no lender or administration fees payable upfront, and there were no upfront broker fees. The full £150,000 loan was paid into the client’s bank account. SME Finance Hub’s commission was paid directly by Fleximize after the loan had paid out, rather than as a separate fee charged to the client. Commission is disclosed before a client commits.
For a business planning to grow, the ability to overpay can be useful if trading allows it. An overpayment may reduce the outstanding borrowing and, under the agreement, may reduce the overall interest cost. The option to settle early can also be valuable if the business is in a position to repay ahead of schedule.
These features should always be checked against the actual loan agreement. Overpayment and settlement calculations, including how any interest saving is applied, depend on the terms of the facility. Businesses should also consider whether making an overpayment would leave enough working capital for wages, operating costs and unexpected bills.
Understanding the costs and personal guarantee
A fixed monthly interest rate can help a business understand the interest rate applying to its borrowing, but it does not mean the loan has no cost or that every repayment option will have the same overall cost. The total amount repayable depends on the agreed rate, the loan amount, term and any applicable agreement terms. Before proceeding, a borrower should ask for the full repayment schedule and total amount repayable, and check how overpayments or early settlement would affect it.
The loan also involved personal guarantees from two shareholder/directors. A personal guarantee can make the person giving it personally responsible for some or all of a business’s debt if the company does not meet its obligations, depending on the wording and terms. The directors should understand the extent of their commitments, when a guarantee could be called upon and what personal assets may be at risk. Independent legal advice may be appropriate if any part of the guarantee or loan agreement is unclear.
This is an important trade-off to weigh against the planned use of the funding. Growth capital may support business development, but the business remains responsible for repayments even if expected growth takes longer than planned.
A supported online process
Mia from Fleximize helped the client with the sign-up process, which was completed online. After the client accepted the offer, the funds were paid out within 48 hours.
Jodi, the SME Finance Hub broker, supported the client from start to finish, helping them explore funding options and identify the offer they considered most suitable for their growth plans. That included helping the client understand the available term choices and the relevant costs and repayment features.
The outcome reflects this client’s circumstances and the offer made by the lender. It should not be taken as a typical rate, term, approval or funding timescale, or as a guarantee that another business will receive similar terms. All lending is subject to status and lender assessment.
Considering growth finance for your business?
A growth loan may be worth considering when a business has a clear funding purpose and a realistic plan for managing the repayments. It is also important to consider alternative options, the total cost of borrowing, any required security or personal guarantees, and how repayments could affect cash flow.
Read more about business growth loans and business loans, or meet the SME Finance Hub team.
SME Finance Hub is a trading style of Capital Business Loans Limited, an FCA-authorised credit broker, not a lender. We work with a specialist lender panel and provide named broker support to help businesses understand their options, costs, repayments, security and personal guarantees. There are no upfront broker fees and no obligation to proceed. Commission is paid by the lender and disclosed before you commit.
Enquiring involves no hard credit search and does not affect your credit score. Further checks may apply if you choose to proceed, and these will be explained beforehand.
To discuss your business’s funding requirements, call 01244 906505 or email hello@smefinancehub.co.uk.