When an associate was looking to fund a management buyout of a company where he was Sales Manager, he turned to us for assistance with the process and in obtaining funding. He needed a £1M loan from the bank but had no real security to put forward, other than the business.

We started by reviewing in detail the business plan prepared by client and visited the business site to understand how it worked there and then and also to get an idea of what it would look like under new ownership.

We also needed to model how we considered it would perform as well as estimate capital spend issues over next 3 years including the potential impact on cashflow. That it was a seasonal business added further complication to the picture.

The client also needed to move the whole business to new premises over the next 3 years which would require an additional large capital spend.

We prepared detailed forecasts and attended numerous meetings with the special Management Buyout unit at NatWest during the course of the funding application and approval.

Our experience in forecasting business cash flow that involved a large capital spend gave our client the confidence that we were the right team to get on board and also proved invaluable in the securing of the finance from NatWest.

The Bank agreed to an initial unsecured loan of £1M for the MBO as well as lending £650,000 for the move to the new site. Subsequently we were able to assist in renegotiating better longer term loan terms with the bank based on the new site being revalued at £3M.

In the end, our was client very happy to secure the MBO. The alternative had been  the previous owner selling to third party, with a future unknown for all employees.

With the site move now complete and better banking funding secured, the business is now busy and very profitable.

Apart from the obvious benefits to New Leaf Plants, we have gained first-hand expertise in working with lenders to obtain unsecured finance for MBO's, for the right business.