Losing a key staff member can be a very challenging time for any business, especially when they happen to be a senior Partner or Director with equity invested in the firm, as they typically want their original investment to be repaid as swiftly as possible after they leave.
In June of this year we were asked to consider a loan for a successful firm of chartered accountants which was intending to buy out a retiring partner. The terms of the buyout agreement were such that they needed to pay the retiring partner in a lump sum. This would have resulted in extracting a large sum of cash from the business, and potentially some from their own pockets. It therefore made sense for them to spread the cost of this over a longer period.
United Trust Bank can offer loans of up to 3 years for just such a purpose, and we were able to provide an approval for the full amount and the term requested with the detailed information presented to us by our broker. Once we were happy that the business was performing well and that the terms of the exiting partner’s buyout agreement were reasonable, it was a straightforward process to release the funds to the client so that the partner could retire with his lump sum and the remaining partners weren’t left with a shortfall of working capital.
Loan amount: £100,000
Term – 36 months