Reparo Finance – The Lender That Will Help in a Crisis

Reparo look at every loan application on its own merits; unlike traditional lenders, Reparo doesn’t have rigid lending criteria. Instead, all circumstances are taken into consideration. This means loans with out-of-the-ordinary circumstances can get funding.

When completing loans Reparo puts a large emphasis on speed; the process to review, approve and complete loans is greatly accelerated by the team working together closely.

In this case, we’re going to take a look at a manufacturing business that was in danger of losing its home and how Reparo’s efficient lending process averted the crisis.

The Situation

Reparo was contacted by a long-standing manufacturing business that needed funding urgently. The business was in the process of exercising an option to buy their factory: the lease and corresponding option-to-buy expired in 14 days.

If the lease expired, the business would be exposed to eviction or a large price hike.

The bank had spent six months reviewing the loan and pulled out at the last minute, leaving the business with a funding requirement of several hundred thousand pounds.

The problem that led to the bank pulling out was regarding the flood defences. The area where the land was based had been flooded three years previously, and although half a million pounds had been spent on flood defences, they hadn’t been officially signed off.

While the defences hadn’t been given official approval they had proved their worth in a recent flood: they were effective, but the sign-off would come after the lease expired.

This left the business with a huge problem.

The Solution

There was a fixed timeline of two weeks to put financing in place for the business, so Reparo’s MD Andrew Ward visited the business within 48 hours.

According to Jason Cossey, one of Reparo’s Relationship Managers’; the first meeting was challenging: “The owners of the business were very worried, they had counted on the loan from the bank and to be left in the lurch at the eleventh hour was devastating. They also worried that no one would be able to help them in the necessary timeframe – we had to get into the details immediately”.

Reparo had to make a quick decision on whether they could help the business – they didn’t want to start a due diligence process that led to no funding because the business would have no time to find alternatives.

The Reparo team has seen hundreds of loan applications and can make quick decisions on the viability of a loan. In this case, Jason and the wider team were able to make an assessment that they could help because:

• The business was able to give the building as security.
• The flood defences worked – they just hadn’t had official sign-off.
• Signing off the defences was imminent, and Reparo was quickly able to seek a second opinion on the claim that they’d be signed off without problems.
• Reparo was able to take a debenture across the whole business, and there were assets in place that had value above and beyond the building.
• The directors were willing to give personal guarantees, and background checks showed these were of value.
• The business had been trading for over 200 years and was a well-known brand.

Reparo was able to comfortably arrive at a yes because of this range of factors; it was testament to the speed and diligence of Jason’s vetting that all of this information could be reviewed in an incredibly short timeframe.

Jason explains how he got this completed: “It was a very hectic time, we needed to do some reasonably detailed due diligence in an incredibly short timeframe while communicating and reassuring the business at every step”.

There are a few reasons why Reparo was able to deliver vetting so quickly:

1. Expertise: The team working on the deal all have at least ten years of front-line commercial lending experience, meaning they could make a quick judgement on the loan viability and then execute the deal under pressure.
2. Support: Jason was leading on the deal, but he had vital support from the wider Reparo team who could review information, chase professional service firms and produce documentation.
3. Communication: Completing a loan means communicating with a range of stakeholders to get the deal agreed in the required timeframe. Reparo make sure that every part of the process is completed in the shortest possible timeframe; this requires communicating effectively with solicitors, underwriters, valuers and the business owners.
4. Efficient internal systems: The Reparo process required Jason to create a credit paper that provided details of the loan for final approval by the credit committee. Because Jason regularly liaises with the credit committee, it was aware of the deal at every stage and could ask questions in real-time. When the credit paper was presented to the committee, it already knew the details and was in a position to sign-off immediately.  
5. Contacts: Reparo has a team of professional service firms, particularly solicitors and surveyors that understand the need to produce results in time-pressured situations.  
6. Can-do attitude: Part of getting deals across the line is an unwillingness to give up. A lot of paperwork needs to be completed, points need to be explained, and problems worked through. Reparo prides itself on driving deals to a positive conclusion.

Outcome

The loan was completed in time for the business to purchase the factory, the flood defences were signed off, and the loan was repaid.

Jason enjoyed working on this deal: “It was satisfying to help the business. It was clear that they were credible and had security, but they didn’t quite fit into the exact profile that a bank needs. I see our role in helping businesses to access capital and continue to flourish as crucial to the economy. If everything was left to traditional lenders so many credible businesses would go without funding because they don’t fit exactly into a box”.

To discuss a loan between £10,000 and £1m, please get in touch with one of the team on sales@reparofinance.co.uk  or 0161 451 5714. You can find out more about us on our website:   www.reparofinance.co.uk