Christie Finance is opening up a new borrowing opportunity for UK nurseries seeking to develop their businesses.
The specialist commercial finance broker, which is part of Christie + Co, is releasing £50m of funding for the nursery, care home and pharmacy sectors. An additional £20m tranche is being targeted at the pub, hotel and retail sectors.
The move highlights that traditional lenders are once again beginning to support and finance new businesses.
Courteney Donaldson, director of childcare and education at Christie + Co said, ‘Funding has been challenging for many nursery owners looking to expand and this will significantly assist those with a credible business plan.
‘Across our specialist sectors last year we saw up to 30 per cent of mortgage offers not making it through to completion. We saw deals becoming protracted, with factors changing along the way and businesses failing to complete. This move will provide a platform from which nursery owners can move forward confidently.’
Ms Donaldson believes that many UK providers will now be encouraged to pursue expansion plans, whether this means acquiring new sites or expanding an existing premises to meet demand for two-year-old places. ‘For those businesses which may want to build an extension for example, this is just the sort of funding they have been crying out for,’ she said.
At the NDNA Claire Schofield, director of Membership, Policy and Communications supports the move.
‘Nurseries have experienced difficulties with accessing finance during the recession, so any move to open up credit to the sector will be welcomed by those looking to secure investment.’
She added, ‘It is vital that nurseries have a robust business plan and resolving nursery education funding issues is vital to enable this, particularly if nurseries are considering capital investment to expand to meet needs for funded two-year-old places.
Christie Finance reports that the Government’s Loan Guarantee Scheme (NLGS) is also proving a spur to investment.
David Grant, head of UK Business Mortgages for Christie Finance said, ‘The 1.0 per cent discount on interest rates form the NLGS has provided a real fillip in tough trading conditions. We have also seen clients take advantage of a less-publicised element of the NLGS – a cash-back facility. For example, a £1m loan would qualify for a cash-back lump sum of £50,000 upon drawdown of a loan. This is a great aid to cashflow or to covering the costs of buying or re-financing a business.’
