Atom bank has delivered a £660,000 loan to support the purchase of a Wolverhampton pub, using the goodwill of the business in place of a cash deposit.
The buyer, who was already the sitting tenant at the Cow Shed bistro pub, was given the chance to buy the freehold from brewery Marstons.
With no deposit available, Ashley Clements, associate director at Christie Finance, approached several commercial lenders.
All refused except Atom bank, which was able to use the goodwill value of the pub as the buyer’s contribution.
This allowed Atom bank to provide a loan of £663,000 at a variable rate of 2.58% plus base rate, with a loan-to-value (LTV) of 66%.
The funding covered the purchase price and left extra for renovation. The loan sits under the Growth Guarantee Scheme (GGS), allowing firms to borrow up to £2m for investment, refinancing or cash flow.
Clements said: “I have worked with Atom bank and Spencer many times before, so I was confident they would be able to support the client in this case, despite getting a firm ‘no’ from many others.
“It’s so important to be able to work with a lender who can quickly establish whether they can support a case, and then also deliver the terms swiftly, even when cases are perhaps more complex.
“Atom bank has a really clearly defined credit policy, which means we know where we stand – other lenders might rely more heavily on underwriter judgement, which often creates more uncertainty.”
Clements added: “The flexibility in Atom’s approach enabled our now mutual client to purchase the freehold of the pub and be in full control of their own destiny, giving them the freedom to choose multiple suppliers and operate the business in a way that they feel fit.”
The deal was delivered to a tight deadline, with Sophie Morton from Lawrence Stephens acting for Atom bank.
Spencer Ford, regional business development manager at Atom bank, said: “This was a case with a tight timeline, and getting it over the line was only possible if all parties were fully engaged.
“The fact that we managed to do so in a matter of weeks is incredibly gratifying, and testament to the professionals involved.
“Atom bank stands apart from rival lenders in this space because of our ability to consider goodwill contributions.”
Ford added: “That flexibility opens up more opportunities for businesses to take the next step and set themselves up for success in the future.
“As champions of British SMEs, we want to play our part in helping them unlock their potential.
“Atom bank was a significant participant in the Recovery Loan Scheme, and we have supported some fantastic businesses through its successor, the Growth Guarantee Scheme.
“These schemes are a valuable way to deliver crucial support to SMEs, something which we are committed to doing at Atom bank.”
