Care Home Commercial Finance Client

Background

A care home business for children with mental health needs, covering South Wales, wanted to grow the business in the long run and internally restructure the business. This entailed one shareholder buying remaining shares of the company whilst releasing cash from already owned properties to allow the purchase of two further properties.

Challenges

Before reaching out to us, they were initially guided down an expensive option with very little support from the first call onwards. This caused the deal to stagnate and threatened to raise the price of the shares, as the business was growing organically – This was a threat to the purchase, as the negotiated price had not been tied down on the share purchase agreement.

Additionally, there were very heavy time constraints impacting the purchase. The client had identified another property which could create the capacity for further children to support. Properties are very difficult to source and are snapped up very quickly. Therefore, a completion of 12 weeks was agreed which meant funding would need to be with them before this.

Solutions

A £2.75m lending facility to support the purchase of the remaining 50% shares that they did not already own, alongside the refinance of two properties to release cash flow to grow the business.

Having fully reviewed the business, its strengths and profitability, we reached out to first tire lenders who offered the full package of funding the business needed. The lender of choice brought in a local relationship manager who fully understood the business and its plans for the future.

By working closely alongside the client, we saved the business over £100k interest per annum compared to the initial route they were guided down – We then completed a follow-on deal over a 12-week period with another site pre-agreed and in process.