Business Loan for an Aerospace Company

Though most businesses have a constant source of cash flow, specialist manufacturers often rely on large projects and fragmented contract revenue to fund their business operations.

If you operate a contracting business, cash flow is provided upon meeting milestones or completing projects themselves, and depending on the size of the overall project, you might be waiting for some time.

A business loan can be the perfect way to support your business with quick cash flow, allowing you to complete contracts whilst covering upfront costs.

This case study details how we provided expertise to deliver a tailored business loan in a short timeframe for an aerospace company.

The Scenario
An existing client of Clifton Private Finance, who has previously used our services to complete a bridging loan contacted us again with a business finance related query. Our client’s positive experience led them to seek further help from one of our Business Finance advisors, Ben Francis.

Our client operates a contract-based aerospace company, and after securing a large corporate contract, they needed to secure capital within two weeks to fund upfront costs and fulfil the order.

They initially sought a trade finance loan for their contract, but the broker suggested a business finance loan instead, here’s why:

• A trade finance loan is used for facilitating trade transactions – you can use the funds for purchasing raw materials and goods, importing and exporting costs, and even bridging payment gaps, but its uses are limited to the completion of trade deals.
• A business finance loan takes seven days to process, whereas a trade finance loan might take up to a month to due its complexity.

By recommending a business loan, the broker saved the client time, made the process of acquiring cash quicker, and allowed the cost of the loan to be spread across a longer period.

The Process

Being an expert in business loans, the broker contacted a selection of lenders for a competitive offer, ensuring that the client’s timeframe for the loan was met.

Due to the nature of the client’s business, the broker faced some challenges in securing funding:

• An irregular revenue stream due to working on a contract basis caused some concerns about cash flow uncertainty.
• Businesses that depend on contract fulfilment may face delays and cancellations whilst completing a contract, leading to repayment issues.
• The niche market that the client operated in relied on a specific service that might not always find customers.
• However, by emphasising the value of the client’s new secured contract, which would add additional revenue to the business, the cost of the loan repayments could easily be covered.

Our broker faced a significant challenge to secure funding: convincing the lenders of the client’s ability to service the loan.

A lender promptly offered a competitively priced secured business loan with a five-year term, flexible payments, and no early repayment charges. This flexibility allowed the client to repay the loan quicker once their contract is completed.

The business loan was secured against the owner’s property to boost lender comfort. Should our client fail to repay the loan, the lender can then use the secured property to reclaim the money owed by the client.

The Results
The business loan was secured for the client within the requested timeframe, allowing them to use the capital to grow their business and successfully fulfil the needs of the new, secured contract.

“It’s always a pleasure to work with returning clients, and the speed and communication I established ensured that the business loan was approved in a very short timeframe. We’re seeing more clients in search of financing to support their business’s growth, and Clifton Private Finance is fully equipped to support them." – Ben Francis, Business Finance Executive

For contract-based businesses, cash flow is a must and is necessary for growth, and seeking business loans for support is a rising trend in the business world.