Caple, the alternative SME credit specialist, has supported Smarts Plumbing Specialists with a £3.5m eight-year, fully unsecured loan, to fund its next phase of growth and introduce the third generation of the Smart family into the ownership of the business.
SMEs such as Smarts typically have difficulty raising money without assets to put up as security to banks. This leads to many business owners making risky personal guarantees or diluting their ownership.
Caple offers unsecured lending based on the future cash flows of the SME, requiring no collateral or personal guarantees as security.
The lender originates loans through a local partner network of accountancy and business advisory firms. Roy Farmer and Harvey Austin at Dains Accountants advised Smarts on the deal.
Founded by John Smart and based in Heath Hayes, Smarts has provided plumbing and heating services across the Midlands since 1972. John’s three sons, Alan, Chris and Kevin acquired the business from their father in 1993 following John’s retirement.
Now employing 83 people, the company installs plumbing and central heating systems into new-build residential properties for major housebuilders including Barratt Homes, Taylor Wimpey and Redrow.
Alan Smart, managing director of Smarts, said: “We’re extremely proud of the family business we’ve built, first with my father and then with my two brothers, over the last 45 years. The Smarts name is known for the best quality work and service across the Midlands.
“This deal with Caple is ideal for us. Other funders weren’t able to support our ambitions of securing the funding we needed to grow while remaining in control of the business. We’re now looking forward to developing the business and bringing the next generation of the Smart family into the ownership of the company.”
Dominic Buch, co-founder and managing partner of Caple, said: “Options for unsecured debt are still limited in the UK. In a service-based economy, this creates a barrier to growth and may push businesses to issue equity instead of raising debt.
“This deal is an excellent example of how we are able to support SMEs to access long-term flexible unsecured debt finance for growth and succession.”
Roy Farmer, corporate finance partner at Dains Accountants, said: “We were very impressed with the proactivity and responsiveness of the Caple team. The team understood Smarts’ business and sector and offered a flexible long-term debt solution to support its growth and succession planning.”
The loans Caple facilitates are part of BNP Paribas Asset Management’s SME Alternative Financing direct lending platform, which offers institutional investors access to SME loans.
This loan for Smarts will complement secured finance provided by Close Brothers.
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