17 Jul Case Study: How a Growing SME Funded Expansion Without a Bank Loan
Case Study: How a Growing SME Funded Expansion Without a Bank Loan
This SME funding case study shows how one growing UK business overcame a familiar obstacle — a bank unwilling to lend — and secured the capital needed to take on a major new contract and expand operations. If you have been turned down by your bank or simply want to explore faster, more flexible options, this story may sound very familiar.
THE CHALLENGE: GROWTH HELD BACK BY CASH FLOW
Our client was a Devon-based manufacturing business with a solid order book, a loyal customer base, and real ambition to grow. They had just secured a significant new contract with a national retailer — exactly the kind of opportunity most SME owners dream about. The problem was timing. Fulfilling the contract required upfront investment in materials and additional staffing, but their customers would not pay for 60 to 90 days. Their existing bank declined to extend further credit, citing existing borrowing levels and the need for additional security.
The directors came to AIM Financial Solutions looking for a solution that would not leave them exposed or force them to turn the contract down.
THE SOLUTION: INVOICE DISCOUNTING SUPPORTED BY THE GROWTH GUARANTEE SCHEME
After a thorough review of the business, our team recommended a confidential invoice discounting facility — a form of alternative business finance that releases cash tied up in unpaid invoices, typically within 24 hours of raising them. Rather than waiting 60 or 90 days for customers to pay, the business could access up to 90% of the invoice value almost immediately, keeping cash flowing as the contract ramped up.
To strengthen the facility further, we structured it under the Government-backed Growth Guarantee Scheme (GGS). This was a meaningful advantage for this particular client. Under the GGS, the lender’s prepayment rate was increased to 100% of eligible invoices, unlocking more working capital than a standard facility would allow. The scheme also improved the overall security position, reducing the personal exposure of the directors and making the facility easier to approve. You can read more about the Growth Guarantee Scheme on the British Business Bank website.
Because AIM is an independent, FCA-authorised broker with over 25 years of experience arranging invoice finance across the UK, we were able to approach multiple lenders and negotiate terms that a direct approach to a single bank simply could not have achieved. For a straightforward overview of how this type of facility works, the ICAEW’s guide to invoice finance explained is a useful starting point.
THE RESULT: CONTRACT DELIVERED, BUSINESS GROWING
With the invoice discounting facility in place, the business fulfilled the new contract on time and in full. Cash flow remained stable throughout the ramp-up period, the team was able to take on additional staff with confidence, and the directors retained full control of their customer relationships thanks to the confidential nature of the arrangement.
Within twelve months, turnover had grown by 35%. The facility has since been reviewed and expanded to support further growth. This is precisely the kind of outcome we work to achieve for every client — and it is one of many reasons AIM has helped UK businesses access over £100 million in funding across our history.
If you would like to explore whether a similar approach could work for your business, speak to our team about alternative business finance today.
FREQUENTLY ASKED QUESTIONS
What is the Growth Guarantee Scheme and how does it help SMEs?
The Growth Guarantee Scheme is a Government-backed initiative delivered through the British Business Bank and accredited lenders. It can increase the prepayment percentage on invoice finance facilities to 100% and improve the security position for SME borrowers, making it easier to access working capital that might otherwise be unavailable.
Does invoice discounting affect my relationship with my customers?
A confidential invoice discounting facility is entirely invisible to your customers. They continue to pay your business directly as normal, so there is no impact on your trading relationships or your professional reputation.
How quickly can AIM arrange an SME funding solution?
Every business is different, but in many cases we can have an indicative offer on the table within a matter of days. As an independent broker with access to a wide panel of lenders, we move quickly and handle the process on your behalf from start to finish.
Ready to find out what is possible for your business? Book a free, no-obligation funding review with the AIM Financial Solutions team at aim-fs.co.uk and let us find the right solution for you.