Caple supports professional automotive valeting firm to grow
Alternative SME credit specialist Caple has helped Direct Valeting Ltd, one of the UK’s leading professional automotive valeting firms, to access a multimillion-pound eight-year unsecured loan. Caple offers access to unsecured lending of up to £5m.
Newcastle-based Direct Valeting was founded in 1998 and is one of the largest professional valeting providers to motor dealerships in the UK. Direct Valeting will use the loan to implement its growth plans in the UK and look at potential acquisitions to increase its national coverage.
Firms such as Direct Valeting can find access to secured lending a challenge because it is a services-based business with few physical assets. Banks generally need tangible assets to put up as security for loans, so raising additional finance to grow was not open to them.
Dominic Buch, co-founder and managing partner of Caple, said: “Direct Valeting is a good example of an ambitious business with a solid track record, but which struggled to access further bank funding. This is because while banks can lend against the tangible assets in a business, they can only do so up to the value of those physical assets available as collateral. After that, they cannot help.
“Our unsecured lending deal demonstrates how we can complement secured lending to help firms like Direct Valeting to implement their growth plans.”
Jason Carpenter, UK managing director of Direct Valeting, said: “The fundraising was very simple for us as a company. Caple’s team was very straightforward, professional and efficient. The deal enables our business to enhance our place in the market with franchised retail dealerships and groups. It also allows us to look at acquisitions which continue to increase our geographical coverage while focusing on customer service and care.”
Direct Valeting provides professional valeting services to more than 550 motor dealerships across the UK. Customers include all of the AM100, the UK’s largest 100 automotive retail groups by turnover. Annual revenue exceeded £35m in the year to 31 December 2019.
In 2015, Direct Valeting was acquired by large pan-European services provider Arwe Mobility Holdings GmbH. The company acquired Leicester-based Quality Assured Valeting in April 2019 which contributed to record revenue and profitability growth.
Caple is the UK’s first firm to offer access to long-term unsecured lending of up to £5m based on the future cash flows of the SME. It requires no collateral or personal guarantees as security. The loans also work alongside existing secured lending, meaning firms can have access to more funding than they would get from their bank alone. It also allows them to maintain their existing financial relationship.
Caple’s technology platform supports a network of accountants and financial advisors to SMEs who identify suitable borrowers and prepare the loan application materials. This enables an efficient and robust credit process. Patrick Lynch, director at Castle Square Corporate Finance, advised Direct Valeting.
Patrick Lynch, director of Castle Square Corporate Finance, said: “The funding package offered by Caple is unique to the UK market and was a perfect funding solution to Direct Valeting. The funds raised provides this large, long-established and fast-growing business with the requisite funds to assist the company through its next stage of significant growth.”
The loans Caple facilitates are part of BNP Paribas Asset Management’s SME Alternative Financing direct lending platform, which enables SMEs to access funding from institutional investors. BNP Paribas Asset Management aims to provide €1bn per year in funding to SMEs across Europe.