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Why UK founders overpay for capital
Walk into a bank with a forecast on the back of a napkin and you'll get repriced, covenanted into a corner, or politely declined. The same business — with a proper Information Memorandum, debt capacity model and a competitive process — typically lands 50–150 bps tighter margin and 0.5–1.0x more leverage. That's the entire job.
Your relationship manager is paid to lend you their bank's product, not the best product. Without a competitive process you have no leverage to negotiate margin, fees or covenants.
A hockey-stick model with no downside scenario tells credit committee one thing: this founder hasn't thought about risk. They'll either decline or stress your covenants to compensate.
Standard covenant packages are written to protect the lender, not your operating headroom. Accept the first draft and you'll be in a default conversation the first time you have a soft quarter.
The capital stack
The right answer is rarely a single product. Most of our deals blend two or three layers of capital to balance cost, leverage and flexibility.
Senior Term Debt
The cheapest senior capital available — typically SONIA + 2.5–4.5%. Best for cash-generative, profitable businesses comfortable with tighter covenant packages and quarterly testing.
Unitranche & Private Credit
Higher leverage, looser covenants, faster execution. Yield premium of 200–500 bps over senior bank debt. Perfect for acquisitions, MBOs and high-growth businesses where speed and flexibility justify the cost.
Mezzanine & Subordinated
Sits between senior debt and equity. Higher yield (typically 8–14%) often with a PIK component or equity warrant. Used to stretch total leverage on transformational acquisitions or MBOs without further equity dilution.
Asset-Based Lending (ABL)
Releases working capital tied up in debtors, stock or fixed assets. Up to 85% of eligible receivables, 50% of inventory. Ideal for asset-heavy businesses or those with seasonal working capital swings.
Venture Debt
Non-dilutive growth capital for VC-backed scale-ups between equity rounds. Typically 25–35% of the last equity round, with a small warrant package. Extends runway without resetting valuation.
Covenant Structuring
Margin matters. But leverage, interest cover, capex baskets, permitted disposals, equity cure rights and headroom matter more. We negotiate the entire package — not just the headline rate.
When founders call us
Different transactions need entirely different pools of capital. We match your specific event with the lender profile most likely to fund it on aggressive terms.
01 · Acquisition Finance
Senior + unitranche stacks combined with vendor loan notes and earn-outs to maximise leverage without breaking your balance sheet. See M&A advisory →
02 · Growth Capital
If your business has predictable cash flows, debt is dramatically cheaper than equity. We raise capex, hiring and product investment without you giving away another share.
03 · Refinancing
Existing facility no longer fit for purpose? We benchmark against the live market and only refinance if we can demonstrably reduce cost or remove restrictions.
04 · MBO / MBI
We structure the senior + mezzanine + vendor-loan-note package that lets a management team take control without giving away majority equity to a PE house.
05 · Working Capital & ABL
Invoice finance, stock finance and revolving credit facilities sized to your true working capital cycle — not a generic 90-day formula.
06 · Recapitalisation
Use debt to fund a dividend recap or shareholder buyout — crystallising founder value without losing operational control or selling the business.
The process · 10–16 weeks
Week 1–2 · Diagnostic
We model your true debt capacity across DSCR, leverage and interest cover. You learn what the market will fund — and at what price — before we approach a single lender.
Week 2–6 · Lender-Ready Prep (Retainer)
Three-statement forecast, normalised EBITDA bridge, covenant headroom analysis, Information Memorandum and full lender data room — built to the standard that gets you priced like a corporate, not an SME.
Week 4–10 · Competitive Process
Curated long-list of 8–15 lenders across clearing banks, challengers, private credit and ABL. We run a structured process with deadlines — so lenders bid against each other rather than dictating to you.
Week 8–12 · Term Sheet Negotiation
Side-by-side comparison of every offer. We negotiate margin, arrangement fees, covenant levels, equity cure rights, capex baskets and amortisation profile — not just the headline rate.
Week 10–16 · Credit Committee & Drawdown (Success Fee)
Credit committee Q&A, legal documentation, conditions precedent, security and drawdown — managed end-to-end. We sit on your side of the table until the funds hit the account. Success fee crystallises on drawdown.
How we get paid
Our fee model has two parts. Both are explained up front, agreed in writing, and exist for a reason.
Phase One
A fixed monthly retainer covering the 4–6 weeks of preparation work. This is what gets you priced like a corporate when you walk into a credit committee.
What's included
Why a retainer? Lender-ready prep is genuine 4–6 weeks of senior advisory work. Charging it as a retainer keeps fees aligned with effort and protects the quality of what reaches credit committee.
Phase Two
A percentage of the facility raised — payable only when the funds land in your account. If we don't get you funded, we don't get paid the success fee.
What's included
Why a success fee? It aligns us with your outcome. We have a direct financial incentive to push for better margin, more leverage and looser covenants — because our fee scales with the quality of the deal we land for you.
Exact retainer and success fee percentages are scoped after the free 20-minute call and depend on facility size, complexity and timeline. All fees are fixed and agreed in writing before any work begins — no time-and-materials, no hidden charges.
"Equity is the most expensive money you will ever raise. Founders who win in the next decade will be the ones who learn to use debt as a strategic weapon — without handing over the cap table to do it."
Kish Patel ACA
Founder & Debt Advisory Partner, Consult EFC
Frequently asked