Inspired Lending has provided a £260,000 revolving credit facility to an IT consulting business in Banbury, Oxfordshire, to support its working-capital requirements and reduce borrowing costs.
The company has regular but unpredictable liquidity needs, which had previously been met through unsecured business borrowing at comparatively high interest rates.
Inspired Lending structured a 24-month revolving credit facility secured by a third-party second charge over a shareholder’s residential property. The arrangement allows the borrower to draw down and repay funds as required during the term.
The company can therefore access liquidity only when needed, limiting financing costs and avoiding the need to arrange fresh borrowing whenever it requires additional funds.
Repayment is expected to come primarily from cashflow generated by the consulting business during the loan term. The shareholders also demonstrated their ability to refinance the property if necessary, providing an additional layer of security.
Inspired Lending said its privately funded model allowed it to consider the borrower’s wider financial position and the practical needs of the business rather than apply a standard lending structure.
Gavin Diamond, chief executive of Inspired Lending, says: “Businesses don’t always need more debt. Quite often, they need better access to it.
“For companies with uneven cashflow, there is little sense in paying interest on money that may sit unused for months at a time or raising expensive short-term money at the last minute.
“A revolving facility gives borrowers the freedom to match funding to the way their business actually operates.
“That can reduce costs, improve financial control and remove the pressure to arrange new finance every time working capital requirements change.
“It’s a good example of how specialist lending can solve commercial problems that traditional funding structures can’t always accommodate.”
