Cooking up success with growth funding
Caple has supported wholesale distributors of food equipment Sephra Europe Ltd (Sephra) with a £500,000 five-year unsecured loan. Caple has now completed ten deals with UK SMEs worth more than £20m.
Sephra has used the loan to purchase the intellectual property of its branded products, previously held by a US company, and expand into new markets. As a result, Sephra expects to hire a further 10 people and more than double its turnover to £10m over the next three-to-four years.
SMEs such as Sephra typically have difficulties raising money without having tangible assets to put up as security to banks. That can mean they instead have to make personal guarantees or dilute their ownership by issuing equity.
Caple is the first in the UK to provide access to unsecured lending based on the future cash flows of the SME. The business requires no collateral or personal guarantees as security. Caple loans complement existing bank lending.
Caple originates loans through a local partner network of accountancy and business advisory firms. Karl Hodson, from professional services firm BTG Advisory, supported Sephra.
Dominic Buch, co-founder and managing partner of Caple, said: “Successful SMEs such as Sephra need funding to reach their full potential. The flexible nature of the loans we offer access to helps businesses like Sephra achieve their goals without the need for personal guarantees.
“By working alongside Sephra’s bank, we have supported a blend of financing that delivers stable and long-term funding that enables it to implement its ambitious growth plan.”
David Archer, managing director of Sephra, said: “We wanted to move quickly, secure the IP rights to our products and to press ahead with our growth plans. The Caple team understood our business and responded by completing the deal in record time.
“We are now able to drive innovation and expand into 20 to 30 new markets across Asia, Australasia, Central and South America, providing huge growth potential. By removing the need to pay royalties, we’re already seeing a positive impact on the bottom line.”
Based in Kirkcaldy, on the east coast of Scotland, Sephra is a wholesale distributor of food equipment selling to restaurants, cafes and hotels groups as well as local catering distributors. The company, which aims to bring a sense of fun and theatre to food, exports to 67 countries globally.
Sephra has grown by innovating and expanding its product range. Starting with chocolate fountain machines, the business now distributes waffle, pancake, donut and popcorn makers. The business also sells Sephra ingredients including chocolate, add water only waffle mix and crepe mix. Last year, the business sold over 300 tonnes of chocolate.
Sephra has used the loan to purchase the IP of its branded products, giving the company full control of these items. By removing the need to pay royalties, Sephra now also retains all profits from each sale.
Sephra will also use the loan to drive product innovation and expand internationally. For instance, the business created a self-service popcorn maker for supermarket Asda. It now sells more than one million tubs of popcorn a year in the UK. Sephra aims to replicate this success with further retailers worldwide.
Karl Hodson, director – Corporate Solutions, BTG Advisory, who advised Sephra, said: “We were impressed with the Sephra’s management and product sustainability. The loan through Caple fits perfectly with the profile of the business. With the deal agreed, Sephra has now secured the full rights to the products it sells and has the ideal platform to grow exports.”
Caple worked alongside high street bank RBS in the deal.
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 and €400m in the UK.