New funding for MBO and manufacturing growth
Caple, the alternative SME credit specialist, has supported UK manufacturer Intastop with a £700,000 eight year, fully unsecured loan. The existing management team will use the loan to complete a management buy-out and invest in its UK manufacturing facilities to grow the business.
SMEs such as Intastop typically have difficulty raising money without assets to put up as security to banks, making personal guarantees or diluting their ownership by issuing equity.
Caple is the first in the UK to offer unsecured lending based on the future cash flows of the SME. The business requires no collateral or personal guarantees as security.
Caple originates loans through a local partner network of accountancy and business advisory firms. Karl Hodson from BTG Advisory advised Intastop on the deal.
Dominic Buch, co-founder and managing partner of Caple, said: “Options for unsecured debt are limited in the UK. While banks can fund an amount that reflects the tangible assets in a business, they can’t help if a business has no further assets.
“Intastop had this very issue. In an asset-light economy such as the UK, this creates a barrier to growth and may push businesses to issue equity instead of raising debt. Our deal demonstrates how we are able to support ambitious SMEs with long term flexible finance for succession and growth.”
Intastop was started in Doncaster in 1992 by founder and shareholder John Hills. It designs and manufactures specialist internal building protection products for doors, walls and people, primarily in the health and mental health sectors. The business employs 34 people and turns over £4.3m a year. It expects to employ a further five people in the next financial year.
The existing management team, which has been running the business for five years, will use the funds to complete the purchase of the company from John Hills. They will also invest in the machines and people they need to manufacture more of Intastop’s products in the UK.
Steve Woodhead, managing director of Intastop, said: “Since starting in 1992, Intastop has been going from strength to strength. This loan enables us invest in our UK manufacturing capabilities and take the business to the next phase of growth.”
“Caple took a more rounded view of our business than other lenders. It offered us a flexible, long-term solution, free of from onerous personal guarantees.”
Karl Hodson, director – corporate solutions, BTG Advisory, who advised on the deal, said: “Caple was the perfect funding solution for the transaction, allowing the team to purchase the business and continue the growth strategy. The real advantage of Caple is that it complements secured lenders, providing a much more suitable funding package.”
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.
Caple has completed four deals worth £9.95m in total for four UK SMEs. It first completed a £1.5m deal with Baltimore Consulting, a specialist recruitment agency. Recently, it facilitated a £4.25m unsecured loan to Ralph Coleman International, a retail services business, and a £3.5m deal with Smarts Plumbing Specialists.
This loan complements existing secured lending from Barclays Bank.