Case Study

Background

An experienced Principal Vet sought to refinance short-term debt originally used to establish two start-up practices. Due to limited appetite from mainstream lenders for start-up funding, the Practices were initially financed by secondary lenders through short-term facilities (typically 5–7 years), placing ongoing pressure on the business’s cash flow.

The Challenge

Although the business had moved beyond the start-up phase and was now well-established with strong goodwill value, it remained in a growth phase. The client was keen to open a third site; however, credit lines with the short-term lenders were fully utilised.
A full review was undertaken with the client to assess current finance arrangements and to better understand their long-term vision for the business.

Our assessment identified that it was the right time to unlock the goodwill value of the business, refinancing the short-term borrowing over a longer term to ease cash flow pressures.

The Outcome

Through strategic refinancing, the existing debt was restructured over a 15-year term—significantly improving cash flow.

With more manageable repayments in place, the business is now well-positioned to pursue expansion, including the addition of a third site—an opportunity that was previously out of reach due to the burden of high short-term repayments.

Future funding requirements will be structured more sustainably, combining longer-term finance with short-term support as needed.

Key Takeaway

Short-term finance can play a valuable role in raising initial capital. However, if overused it can create cash flow strain and limit a business’s ability to grow.

It’s crucial to review finance arrangements with a Finance Professional at key stages—particularly when planning expansion—to ensure a more balanced and sustainable funding structure