A long-established UK creative agency approached us after its bank rejected a growth funding request on affordability grounds, despite the business already servicing a more expensive loan. We secured £200k from a specialist lender, structured to allow the business to access a further tranche within three to five months. The initial funding refinanced an existing high-cost facility and released cash flow to support sales, marketing and business development, giving the business the growth capital its bank was unwilling to provide.

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Client snapshot

Industry: Creative services specialising in design and branding for the property and consumer brand sectors.

Size: Around £4 million turnover, approximately £500,000 net profit and more than 40 employees.

Years operating: 27 years

Description: A well-established creative agency with deep expertise in property sector design and consumer brand projects. The business owns its commercial premises and has a strong balance sheet, including approximately £1.5 million in net assets, no CCJs and a solid commercial credit profile. An existing banking facility was supported by two personal charges. The director had successfully guided the business through both a recession and a pandemic and was now focused on the next phase of growth.

Geography: United Kingdom, with the majority of property sector revenue coming from international projects.

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The challenge

The business had a clear growth plan: increase turnover from around £4 million to between £5 million and £5.5 million within two years, before preparing for a potential exit.

To achieve this, it required £400k in funding. This included £100k to refinance an expensive short-term loan that was reducing profitability, together with £300k to invest in sales, marketing and business development.

Its main banking partner declined the application on affordability grounds. The decision was difficult to reconcile, as the business was already servicing a more expensive lending facility. The feedback provided was generic and offered no clear route forward.

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Why they came to us

• The bank's affordability assessment did not reflect the reality of the business, so they wanted a second opinion that considered the full picture.

• An existing short-term loan with a high interest rate was putting unnecessary pressure on monthly cash flow.

• Their growth plans required funding based on realistic business assumptions that the bank was unwilling to consider.

• They wanted access to the wider lending market, not just high street banks.

• A live grant opportunity meant they needed funding that could be drawn down in stages, rather than receiving the full amount upfront.

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Our approach

We recognised that this was a funding structure issue rather than a credit issue. The business was financially sound, but the high street bank had assessed it using criteria that did not reflect its true position. With a 27-year trading history, fully owned commercial premises, a healthy debtor book and an experienced leadership team, the business presented a much stronger proposition to specialist lenders than to a traditional bank.

• Mapped the full lending market, including specialist, alternative and Growth Guarantee Scheme-backed lenders.

• Targeted lenders with experience supporting creative businesses and companies with international revenue exposure.

• Prioritised a tranche-based funding structure so capital could be drawn down as required.

• Negotiated an extension when the lender's offer expiry risked delaying the associated grant application.

We positioned the business based on its actual strengths. It was operationally strong, cash-generative, well secured and had a clear growth strategy. The selected lender approved an unsecured tranche facility, providing immediate access to the first £200k while allowing a second drawdown within three to five months on the same commercial terms, subject to the agreed conditions being met.

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The impact

• Secured £200k as the initial tranche, refinancing the high-cost loan and funding immediate investment in sales, marketing and business development.

• Structured the facility to allow a further drawdown within months on the same agreed terms.

• Enabled the founder to continue pursuing a public sector grant without taking on unnecessary debt upfront.

• Preserved the existing banking relationship while replacing an expensive short-term facility.

• Delivered funding that matched the way the business planned to grow, with additional capital available when required rather than before it was needed.

The business now has funding that reflects how it actually operates. The second tranche remains available when the time is right, giving the business flexibility while supporting its long-term growth plans. What initially looked like a setback ultimately became a better funding solution.

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Takeaway

A bank declining a funding application on affordability grounds does not always mean a business is unfinanceable. It often reflects the lending criteria of that particular bank rather than the strength of the business itself.

Specialist lenders take a broader view by considering trading history, balance sheet strength, sector experience and future potential alongside affordability. The right funding structure can be just as important as the amount borrowed. Drawing capital in stages can preserve flexibility, reduce interest costs and keep other opportunities, such as grants or future debt facilities, available when they are needed.

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