A great time for the right deal

Lenders price for risk, so timing your application right can make a significant difference.

The cost of borrowing is made of several factors, many of which (such as interest rates) are out of your control as a business owner. One lesser-known factor which you do control, is timing. 

Our customer in the children’s day nursery sector had the experience of owning two nurseries and then built a larger, purpose-built unit. Their growth funder lender based their decision on there being no trading record for the new nursery and as a perceived “high risk”, set the interest rate in excess of 13 percent per annum.

The customer got in touch with Swoop, seeking a better deal. It was clear from our first conversation that the customer had reached a level of maturity which meant the business would be within the appetite of lenders whose risk appetite was for standard trading rather than new start business. With lower risk comes lower interest margins and we were able to search for another lender whose ongoing covenants would be much less demanding.

Based on their circumstance, Swoop had to put together a bespoke solution that fit their needs.

The result? We were able to slash the interest rate in half – from 13 percent to 7.5 percent, easing cashflow for the business and reducing the level of regular monitoring with their bank.

Our customer now enjoys cheaper borrowing over a longer period and the opportunity to focus on business operation and growth, without the regular check-in from the lender and avoiding onerous covenants interfering with the business strategy.