Ross Hyde
Ross discusses a recent example of how we have helped a Cornish ice cream producer and retailer to expand their offering with a second retail store
Spec
| Industry area | Loan amount | Turnaround |
| Food Production and Retail | £25,000 | 2 weeks |
Situation
My client is an experienced entrepreneur, who makes and sells his own ice cream in a popular holiday town in Cornwall, as well as operating a successful café there with his wife and daughters. The ice cream business is growing year on year, with a good social media following, and decent turnover. He became aware of an opportunity in a nearby town, where an existing ice cream shop was available to purchase. However, after some investigation found the shop to be un-mortgageable, so needed to raise the purchase price quickly by another means.
Strategy
He called me, knowing that I have found solutions for him in the past, and we discussed how he could arrange a loan for £25,000, speedily, to take advantage of the opportunity.
I have recently got to know a popular product called the merchant loan, which lends retailers money against card receipts. For a borrower with a good track record of sales, the merchant loan solution is a great innovation. The repayment of the loan is taken as a percentage of every card transaction, until the money is repaid. For example, my client receives 80% of the future payment, and the lender gets 20%. This takes away the necessity to ‘make’ the loan repayments every month, and removes the risk for my client.
Solution
Merchant loans are a great solution for businesses with regular card revenue. And in this case it means that in the summer months, a large proportion of the loan can be repaid, and (if there’s any still outstanding) smaller payments can be made through the leaner winter months.
The lender was able to forward the money within two weeks of my initial conversation with my client, allowing him to go ahead with the purchase. The new property was open for business just in time, at the start of August, and has allowed them to take full advantage of holiday season.
He’s once again pleased with the support that I was able to offer him, and will be coming back to me when it’s time to redevelop the new site, with new glass-fronted counters and fridges.
