Fast growing Yorkshire business Exquisite Handmade Cakes Ltd has secured a five figure sum for further capital investment with the help of crowd funding company rebuildingsociety.com in a deal supported by corporate lawyers from Clarion.
The company, which was founded nine years ago by managing director Viv Parry, identified a need for more efficient fully automated cake portioning machinery, but ran into problems when trying to secure bank funding as the equipment was being sourced from outside the UK.
“We were faced with the option of either taking on very expensive asset finance or bank funding that was not available until the machine was physically in the UK,” explains Viv. “Knowing of rebuildingsociety.com, I approached them and was able to secure the full investment we needed at a competitive rate as well as overcoming the problem of us sourcing the machinery from the United States.”
Exquisite Handmade Cakes has enjoyed growth of more than 20% year on year and has a turnover of £1.6m. It currently employs 32 staff from its premises in Kirkstall Road and expects to relocate in the next year as it continues to expand. The business sells through distributors and contract caterers, and customers include Sodexo and Waterstones’ new ‘Café W’ concept.
“The business has grown quickly and with ambitious plans to double or even treble our turnover in the next five years, continuing to invest in capital equipment is vital to our continuing success,” explains Viv. “Unfortunately, traditional forms of funding are not always flexible enough to meet the needs of small businesses so crowd funding provides an attractive alternative.
“As a dynamic, forward looking firm, Clarion already had experience of working with clients that had used crowd funding and so was able to provide sound advice. We found the team very helpful and efficient.”
Maxine Burton, associate in Clarion’s corporate team, adds: “The concept of crowd funding is that a business applies to borrow from a community of people. A crowd funding agreement is similar to any loan agreement and it’s important that legal advice is sought before entering into this type of commercial contract, particularly if personal guarantees are required.
“Having already worked with a number of clients who have gone down this funding route, we were able to make the process as smooth as possible, reviewing all of the documentation and ensuring that Exquisite Handmade Cakes had a clear understanding of exactly what they were signing up to.
“Crowd funding is proving to be a useful alternative to traditional funding, particularly for smaller businesses, and we expect this trend to continue.”
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