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About the Business

Company Name: AVARO (MIDLANDS) LIMITED Company Number: 07210196
Business Type: AGRICULTURE, FORESTRY AND FISHING Years Trading: 5-10 years
Business Location: Birmingham

About the Risk

Risk rating


Default rate


Bad debt rate


About the Security

Security Offered:

Personal Guarantee - PG from Mike Downes

Est. Equity: 50000.00

Fixed Asset Debenture - Fixed charge over the asset being purchased with the loan proceeds

Est. Equity: 37965.00

Corporate Guarantee - CG from subsidiary company, HARRINGTON WOODFUEL CO. LIMITED

Est. Equity: 0.00

Risk Indicators Identified:

Marginal Growth
This company has shown low levels of growth over recent financial reporting periods
Losses Identified
This business has recorded losses in at least one of the last two financial years. See the finances tab for more information
High Debt-to-Equity Ratio
This company has a higher than average level of company debt in relation to its equity
Inter-company Loans
We have identified loans made from the applicant business to another connected company
This listing contains disclosures from ReBS. Lenders are encouraged to read them in the profile tab

Important Files

Who are we?

Harrington Woodfuel Ltd (HWF) are a Woodsure & Ready to Burn Certified firewood company that is a wholly owned subsidiary of Avaro (Midlands) Limited. HWF is devoted on producing and supplying the finest Kiln dried hardwood firewood. Our focus is playing our part within the British Forestry industry, helping to make British firewood sustainable for the future. We sell a variety of products on our website, all for different uses and with different price points. These include: Kindling (Softwood) @ RRP £4.50 Per Bag, Biomass Firelighters @ RRP £8 Per Bag, Pizza Logs (255mm) @ RRP £41+ & Oak smoking blocks (1.5kg box) @ RRP £7.00.
The background to the business is all down to the idea from the directors to grow a business in a new growth industry that will have a positive impact on the environment. Wood or biomass is becoming increasingly more common to be used as a sustainable fuel to heat hot water, provide fuel and energy on a large and small scale. Woodfuel is considered to be ‘carbon lean’, meaning that each tree absorbs the same amount of carbon dioxide when growing as it releases when burned. When a woodland is managed in a sustainable manner new tree growth will be absorbing atmospheric carbon dioxide, offsetting that released by the woodfuel produced from the woodland. The overall contribution to atmospheric CO2 levels is minimal. There are so many benefits from using woodfuel:
• Bringing woodlands back into management
• Saving carbon dioxide
• Encouraging wildlife
• Reducing waste
• Improving air quality
This along with the emergence of the UK trying to be a greener country have meant the opportunities for growth are very promising once we can sort our production capacity – with the UK looking for alternative way to produce sustainable energy and reduce costs.
Just for complete transparency, the directors have a background in project management (property) and the parent company in the group, Avaro (Midlands) Ltd, are property consultants that manage medium to large scale building projects. Avaro is already very profitable, and these profits will be used to service the potential loan.

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Loan Offers

What is the loan for?

The Loan from ReBS is being used to purchase a new Kiln for HWF that will increase our production capacity by approximately 3 times. At present we are having to turn work away, which is resulting in the business stagnating and making the small loss details in the last set(s) of accounts. We have provided to ReBS a full copy of the quote so you can appreciate the capacity and size of the Kiln we are looking to purchase.
In terms of additional sales, at present we are turning work away due to capacity issues, and are confident that we will easily be able to instantly double sales in the first year and be up to maximum capacity within 18 months / 24 months – and at these levels of sales the business becomes profitable and self-financing.
As a business we have looked at a number of options for financing the Kiln, however Asset Finance hasn’t been acceptable due to the lenders not liking the asset we are looking to finance – hence the request to ReBS.

Why consider investing?

HWF will have state of the art equipment that will enable production to increase 3-fold – and in turn profits to service the debt. As a backup, and in the short term there is the existing business of Avaro that can provide debt service (Management Accounts to March 2019 show a Net Profit before Tax of £190K).
In terms of security, a personal guarantee will be provided along with a charge over the asset – which is business critical.
This is a comment direct from Central Business Finance (The introducer / Advisor) – At HWF they have already had a finance agreement in place for a 36 Month period to purchase a Biomass Boiler in 2015, which was paid A1 and the agreement finalised and we paid the title fee in 2018. Whilst we haven’t organised the other loans, I do know ART very well and they have confirmed verbally an A1 payment history for Avaro.
Official estimates suggest that wood-burning stoves could actually account for around 10% of the UK government’s carbon reduction targets by 2020. This ties in perfectly with the government’s aim to fulfil 25% of domestic heat energy requirements via renewable sources by 2020. While current sales of wood-burning stoves are running at around 175,000 units per annum, with more than 1 million homes already using wood-burning stoves and fireplaces, there is still scope for further growth.
The introduction of more efficient wood-burning and multifuel stoves will ensure that older models which are due for replacement will be replaced by more efficient stoves. This in itself will help to reduce carbon emissions yet further. To put this in simple terms, when taking into account predicted demand and the expected supply of fuel it is forecast that wood-burning stoves could reduce UK carbon emissions by as much as 2 million tonnes per annum.
We all know that there are many wood-burning stoves available today which have an efficiency rating in excess of 80% against an efficiency rating for a traditional coal fire or between 20% and 30%. While the ability to significantly reduce the amount of energy wasted when fuel is burnt is admirable, where do wood-burning stove stand when it comes to carbon emissions?
Official statistics show that a correctly installed wood-burning stove in good working order will produce 0.008 kg CO2 per kilowatt. This compares to 0.198 kg for gas and 0.517 kg for electricity. So, even these most basic of figures highlight the greater efficiency of using a wood-burning stove to heat your home. The situation with carbon emissions is also favourable for wood-burning stoves with a traditional home reducing carbon emissions by 22% after replacing a traditional gas fire with a wood-burning stove. The figure for a traditional open fire is 14% while replacing an LPG gas fire with a wood-burning stove will reduce your carbon footprint by 36%.
Overall, whilst HWF is still in transition, the debt service will be provided by a business (Avaro) that has a track record of profits to support the ReBS loan. This is backed up by a guarantee & also a charge over the asset. These businesses also have a track record of borrowing funds and repaying A1.


The borrower business will be Avaro (Midlands) Limited, but the funds will be used to purchase a kiln on behalf of another group company, Harrington Woodfuel Co. Limited (HWF).

HWF is a wholly-owned subsidiary of Avaro.

The finances tab shows the accounts of the older, more established parent company, Avaro. For reference, management accounts and a cashflow forecast for HWF have been uploaded to the listing. However, lenders should be aware that these have not been reviewed by our forensic accountant.


This loan will be secured by way of Personal Guarantee; a fixed asset charge over the asset being purchased; and a corporate guarantee.

A PG will be provided by the sole director, Mike Downes. Mr Downes owns two properties with a combined estimated value of £350,000 and a combined estimated equity of £200,000. As per our policy, the PG value has been capped at £50,000.

A fixed asset debenture will also be taken over the asset being purchased with this loan. The purchase will be overseen by rebuildingsociety and the loan advance will be sent to the vendor directly. A first priority fixed charge will be taken over the asset, a kiln, which has a purchase price of £75,930 (plus VAT). 50% of the purchase price has been taken as the estimated assigned value of this fixed charge.

To complete the security package, a corporate guarantee for the debt will also be provided by the subsidiary company that will be purchasing and using the kiln, HARRINGTON WOODFUEL CO. LIMITED.