£14.5m asset based lending refinance for a building materials import and distribution business
- Sector
- Building materials, import and distribution
- Facility
- £14.5m revolving asset based lending facility across trade receivables, inventory and commercial real estate, including a £5m UK Export Finance guarantee
- Lender
- A UK challenger bank's growth finance team
- Completed
- November 2026
The situation
A UK building materials group imports from long-standing overseas suppliers and sells across the UK, Europe and international markets. It had outgrown its funding. Its senior facility sat with a non-bank asset based lender, which had started restricting drawdowns. That squeezed stock purchases right in the middle of the trading season.
To fill the gap, the business had built up around £4.5m of short-term, high-cost loans from a range of alternative lenders. Tax payments had fallen behind, and suppliers were being paid late. The business was profitable and margins were improving, but its funding structure was holding it back and making it look riskier than it was.
What we did
- Rebuilt the case for lenders. We produced the group's integrated forecast model, a 13-week cash flow and the narrative for the lender's independent business review, so credit could see the real trading picture and the headroom after completion.
- Ran a competitive process across banks, non-bank ABL lenders and specialist funds, with a credible back-up lender in reserve.
- Took it through several rounds of credit committee. This was a hard deal to get approved. Each time credit raised concerns about liquidity in the first months after completion, we answered with a revised headroom plan, £1.45m of new shareholder equity and a clear completion test, until the bank approved.
- Structured the facility around the whole group. Four group companies borrow jointly, against three asset classes - trade receivables, inventory and commercial real estate - with a £5m UK Export Finance guarantee inside the borrowing base to support overseas sales.
- Managed the deal to completion. We handled the independent review, valuations, security across two jurisdictions, the redemption of the existing lender, and the board succession plan the bank required.
The result
| Area | Before | After |
|---|---|---|
| Senior funding | Non-bank ABL facility with restricted drawdowns | £14.5m bank ABL facility, 3-year term |
| Short-term debt | About £4.5m of high-cost loans from alternative lenders | Most expensive lines cleared on day one, the rest amortising |
| Export sales | No dedicated support | £5m UK Export Finance guarantee in the borrowing base |
| Tax and suppliers | Arrears and stretched terms | Brought up to date at completion |
| Cost of funding | Non-bank pricing plus high-cost short-term debt | Bank pricing on one consolidated facility |
Why it worked
The business was fundamentally sound, but its funding made it look risky. A full refinance onto one bank facility, sized on the full asset base of receivables, stock and property, with an export guarantee and enough equity to show day-one headroom, gave the bank a deal its credit committee could approve. It also gave the owners a funding line that grows with the business.