Caple, the alternative SME credit specialist, has supported Smarts Plumbing Specialists (“Smarts”) with a £3.5m eight year, fully unsecured loan. Smarts will use the loan to fund its next phase of growth and introduce the third generation of the Smart family into the ownership of the business.
SMEs such as Smarts typically have difficulty raising money without assets to put up as security to banks, making risky personal guarantees or diluting their ownership.
Caple is a first in the UK in offering unsecured lending based on the future cash flows of the SME, requiring no collateral or personal guarantees as security.
Caple originates loans through a local partner network of accountancy and business advisory firms. Roy Farmer and Harvey Austin at Dains Accountants advised Smarts on the deal.
Dominic Buch, co-founder and managing partner of Caple, said: “Options for unsecured debt are still limited in the UK. In a service-based economy, this creates a barrier to growth and may push businesses to issue equity instead of raising debt.
“This deal is an excellent example of how we are able to support SMEs to access long term flexible unsecured debt finance for growth and succession.”
Founded by John Smart and based in Heath Hayes, Smarts has provided plumbing and heating services across the Midlands since 1972. John’s three sons, Alan, Chris and Kevin acquired the business from their father in 1993 following John’s retirement.
Now employing 83 people, the company installs plumbing and central heating systems into new-build residential properties for major housebuilders including Barratt Homes, Taylor Wimpey and Redrow.
Alan Smart, managing director of Smarts, said: “We’re extremely proud of the family business we’ve built, first with my father and then with my two brothers, over the last 45 years. The Smarts name is known for the best quality work and service across the Midlands.
“This deal with Caple is ideal for us. Other funders weren’t able to support our ambitions of securing the funding we needed to grow while remaining in control of the business. We’re now looking forward to developing the business and bringing the next generation of the Smart family into the ownership of the company.”
Roy Farmer, corporate finance partner at Dains Accountants, said: “We were very impressed with the proactivity and responsiveness of the Caple team. The team understood Smarts’ business and sector and offered a flexible long-term debt solution to support its growth and succession planning.”
The loans Caple facilitates are part of BNP Paribas Asset Management’s SME Alternative Financing direct lending platform, which offers institutional investors access to SME loans. BNP Paribas Asset Management aims to provide €1bn per year in funding to SMEs across Europe and €400m in the UK.
Caple has now completed three deals worth £9.25m in total for three UK SMEs. It first completed a £1.5m deal with Baltimore Consulting, a specialist recruitment services company in the Summer. More recently, it facilitated a £4.25m unsecured loan to Ralph Coleman International, a retail services business.
This loan with Smarts will complement secured finance provided by Close Brothers.