AFP's Ludgate support is breath of fresh air
A respiratory equipment manufacturer has breathing space after securing five-figure investment on better terms than that available from high street lenders.
AFP Medical, based in Rugby, Warwickshire, has attracted £65,000 investment through the Thincats peer-to-peer loan network.
The funding was needed to develop the latest version of the company’s medical nebuliser which is now supplied to hospitals, medical practices and individuals in the UK, Australia and Europe.
Following the success of the latest product, it is expected the firm will double its current production of 25,000 units per year within the next 12 months.
Despite assurances from a high street bank, AFP Medical was switched onto an unsuitable arrangement which hindered the firm’s operation. This caused managing director Alan Pavis to thoroughly research alternative sources of finance – leading him to Thincats.
The deal came to fruition after Alan sought the advice of financial experts Ludgate Finance, which has offices in Birmingham, Coventry and Wolverhampton.
He said: “One of the most significant things about this was not only the speed at which it was arranged but the fact the deal we agreed was vastly better financially for the business than was available on the high street.
“The overall costs are now significantly lower than we were being asked to pay by the bank and I am now able to spend time managing the business rather than the bank account.
“To make the nebulisers we had to invest £30,000 upfront, which the bank had initially said they would provide.
“We committed to making the spending but then the bank switched us onto an unsuitable arrangement.
“This caused us a major problem as we had several contracts we needed to fulfil and the arrangement with the bank was too expensive.
“After researching alternative sources of finance, I approached Ludgate and the entire deal was agreed in less than three weeks.”
Since the investment, AFP Medical has been able to double its workforce.
Richard Mason, director at Ludgate Finance, said: “There is an assumption that if people agree a deal with private investors the rate of interest will be higher than if they had come to an agreement with a mainstream lender.
“AFP Medical is proof that this is often not the case, especially in these times of economic uncertainty when banks consistently refuse to loosen the purse strings.
“This shows that well-run private investor networks, such as Thincats, can provide a kick-start for the economy as well as being valuable tools for businesses which are looking to expand and diversify but struggle to secure the necessary financial backing.”
Picture caption (l/r): Alan Pavis, AFP Medical; Richard Mason, Ludgate Finance.
This was posted in Bdaily's Members' News section by Simon Gilbert .
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