ThinCats loan turns borrower into investor

By Mike Millington, partner relationship manager

While many SMEs continue to struggle to access the funding that they need to grow and develop through traditional funding channels, some discovered the benefits of alternative finance early.

One such company is AFP Medical, who have managed not just to grow, but also to use the funding in such an astute way that they now have capital to invest themselves.

Providing the right equipment to help patients across the world receive precise doses of medicines for conditions like asthma, bronchitis, cystic fibrosis and chest infection is no mean feat – but Rugby-based company AFP Medical does just that. A family-run business since 1978, AFP design and produce respiratory therapy equipment, specialising in nebulisers – clever devices which transform liquid medication into breathable, aerosol form.

The business was finding the banking situation difficult after the 2008 financial crisis, and approached Ludgate Finance for help. Richard Mason, director at Ludgate, looked in detail at the business, their trading history and future plans, and decided that they had a very viable proposal. Richard advised AFP that the ThinCats platform could offer a loan at a much more competitive rate to clear their invoice factoring issues; and so the loan was arranged in a timely manner.

AFP used the ThinCats loan to pay off the bank and immediately decreased their costs by around 70%. Alan Pavis, director at AFP, explained: “It solved many of our problems, allowing us to pay our suppliers and reliably supply our customers.”

Feeling better placed and better equipped, they went on to tender for a large NHS contract, which they subsequently won.

As a result, they were able to pay off their loan in a very timely manner, and were also left with some extra capital, which they now invest in other businesses on the ThinCats platform. The full circle seems entirely appropriate, and Alan acknowledged: “We are really pleased to be able to help other businesses in the same way that the ThinCats loan helped us.”

Alan added that AFP Medical have plans for bigger and better things in the future: “We currently rent our building, but would like to purchase our own commercial premises.”

And how will this be financed? Another ThinCats loan may be bubbling…