The owner of a profitable boat hire business who was refused a payment holiday on a bank loan has managed to keep his head above water thanks to the efforts of a partner at Weybridge-based chartered accountancy firm TWP.
With much of its business coming from hiring out boats for cruising on the River Thames, Taggs Boatyard, in Thames Ditton, south west London, tends to see a seasonal fall in trade between October and March, with its busiest period being the warmer summer months.
Owner Jeremy Munk decided to ask the high street bank he had been with for 11 years for a payment holiday on the company’s loan, but was astonished to have his request refused on the grounds that Taggs Boatyard was not profitable enough.
Jeremy was bracing himself for a tough winter financially, until his son, TWP managing partner Philip Munk, came to the rescue. Philip suggested applying to a new business loan service called Funding Circle.
Set up in August 2010, Funding Circle is a web-based service which allows small and medium-sized businesses to borrow from wealthy individuals as an alternative to banks. Firms can borrow up to £75,000 for one or three years, with interest rates ranging from seven per cent to nine per cent, depending on the borrower’s credit rating.
Since its inception, Funding Circle has seen more than 3,000 lenders contribute towards 165 loans totalling £5.5 million. Each loan applicant pays Funding Circle a two per cent upfront charge with monthly interest payments going to lenders, while lenders pay Funding Circle one per cent of the money they invest.
Philip handled the application on behalf of his father and approval was given within a day with the funds arriving within two weeks.
Philip said: “My father’s business is fully solvent, profitable and he has never missed a loan payment, and yet all this meant nothing to the bank. Thankfully, I was able to help him secure the finance he needed through Funding Circle, which was much faster and more straightforward than going through a bank.
“The lack of lending from banks is still one of the biggest problems facing many small businesses today. Even more worrying is the fact that many small business owners do not realise that alternative sources of funding are available and that they don’t have to go through the banks.”
For further information, please contact TWP on 01932 704700.