Breaking Into Bigger Contracts: £50k Facility Frees Up Cashflow for Growing Construction Business
Company Sector: Construction
New Amount:
£50,000
Loan Type: Term Loan
The Challenge
“Cash balances at times dropping to around £1,000, leaving very little financial flexibility”"
Trading for five years, our construction business client has built a strong reputation delivering residential projects. With a solid foundation in place, the director had identified an opportunity to expand into commercial and industrial work, taking on larger, higher-value contracts. The business's ability to move forward was restricted by expensive short-term borrowing taken on during a difficult trading period earlier in its journey.
Repayments were putting considerable pressure on monthly cashflow, with cash balances at times dropping to around £1,000, leaving very little financial flexibility. Despite having strong growth plans and potential contracts lined up, the business simply didn't have the working capital to recruit staff, build reserves, or comfortably fund the upfront costs required to win larger projects.
Our Solution
“Replacing it with a longer-term, lower-cost facility significantly reduced the monthly repayment burden while freeing up additional capital to support expansion.”
After reviewing the company's financial position and growth plans, Bear arranged a £50,000 term loan to both refinance the existing borrowing and inject fresh working capital into the business.
A key element of the facility was consolidating the client's expensive short-term loan - originally a 24-month agreement they were only halfway through. Replacing it with a longer-term, lower-cost facility significantly reduced the monthly repayment burden while freeing up additional capital to support expansion. The structure also gave the director the option to repay early and save on interest.
The Results
“The funding immediately improved the company's financial stability, removing the strain of high-cost borrowing and strengthening its overall cash position.”
The funding immediately improved the company's financial stability, removing the strain of high-cost borrowing and strengthening its overall cash position.
Healthier monthly cashflow and a working capital buffer in place means the business now has the confidence and capacity to pursue larger contracts without relying on overdraft facilities or running on minimal reserves.
Longer term, the facility has positioned the business to move beyond its residential niche and into commercial and industrial construction, supporting sustainable growth. With stronger finances and the flexibility to scale, the company is now in a much better position to secure larger projects and keep building on the reputation it's established over the past five years.
Outgrowing your current situation but held back by old borrowing? Get in touch - 01832 770 273