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IMPELLICO Services is seeking to raise a short-term loan of £150,000 via peer-to-peer lending platform rebuildingsociety.com after a major client went into administration.
The business, based in Morley, West Yorkshire, has been trading for three and a half years and installs, maintains and cleans refrigeration equipment in supermarkets.
Ed Sanders, co-founder of Impellico Services, said: “It is quite a fast-growing business.
“Our turnover in the month of August this year exceeded the turnover for the whole of the turnover for the last financial year.”
In the last financial year, the firm turned over about £220,000. It is at around £1m for the year to date and expects to turn over £1.3m-£1.4m by the end of its financial year in December.
“The reason I approached rebuildingsociety is about three weeks ago one of our largest clients went into administration quite suddenly,” explained Mr Sanders.
“They owed us more than £150,000,” he added. “2013 was going to be extremely rosy for us and suddenly that happened.
“Although it hasn’t affected our order book, our current clients have been excellent and kept our order book filled, we have plenty of new work in the pipeline... the problem is going to come when we look at our short-term cash flow.
“A six-figure sum like that is a large amount to effectively go to bed with one night and wake up without.”
Impellico Services either works for supermarkets directly or indirectly via their refrigeration engineering contractors. Two of its key current customers are Bradford-headquartered supermarket Morrisons and George Barker & Co, also based in Bradford.
Mr Sanders said Impellico Services decided to turn to Rebuildingsociety for a quick cash injection in the form of a loan.
Leeds-based rebuildingsociety.com, which was founded in December 2011 by Leeds University graduate Daniel Rajkumar, helps businesses raise funds through its online community of individual lenders.
Businesses can borrow between £25,000 and £2.5m via rebuildingsociety.com and individual lenders can lend between £10 and £2,000 on any one bid, but can place multiple bids. The average amount lent is £5,000 per person.
Firms apply to be listed on the online marketplace and must meet certain criteria. Once the business is listed lenders will propose an interest rate according to risk and firms can decide whether to accept.
Impellico Services’ bid for funding is now live on the rebuildingsociety.com website. So far around £10,000 has been pledged by investors via the platform.
Mr Sanders said: “We had been looking to break even this year after a long period of growth at the expense of margins, but the client going into administration will leave us facing a loss-making 2013.
“However, we are making a month-on-month profit and that profit will be sufficient to trade through the loss by the end of 2014.”
He added: “We have been growing at a rate of over 300 per cent per year year-on-year and this year has shown in excess of 500 per cent growth and we are certainly hoping to sustain the 300 per cent level we have been seeing as a minimum so far.”
Impellico Services directly employs five people, but uses agency staff and sub-contractors too. “So we are responsible for the employment of, at our peak this year, of about 50 people”, said Mr Sanders.
Mr Sanders, who set up Impellico Services with co-director Craig Burton, said that when the client went into administration the easiest thing to do would have been to close the firm’s doors and enter into a pre-pack administration.
“It would have saved me a lot of money but also a lot of emotional stress and sleepless nights,” said Mr Sanders.
“But it’s important to me personally and all of our colleagues that we do the right thing, the ethical thing, and that’s to carry on trading for the sake of all the stakeholders in our business, particularly our suppliers and our employees.”
Since completing its first loan in February this year, rebuildingsociety said it has made over 20 loans to businesses across the UK, advancing more than £1.1m.
Published on: 4:48PM on 20th November 2013