KETLEY TOWN CONVENIENCE STORE LTD (FORMERLY L.S. DELTA)

Funds raised

£34,820.00

Final AER

19.52%

Loan term

60 MONTHS

Deadline

2018-06-20

Micro Loan Opportunities
Buy Capital Seller's
Premium
Price Buyer's
Rate
BuyBack
£362.17 +0.50% £363.98 19.73%
£27.16 +2.95% £27.96 18.43%
£362.17 +3.50% £374.85 18.15%
£27.16 +3.95% £28.24 17.91%
£9.05 +3.95% £9.41 17.91%

About the Business

Company Name: KETLEY TOWN CONVENIENCE STORE LTD (FORMERLY L.S. DELTA) Company Number: 10975410
Business Type: Years Trading: Less than 2 years
Business Location: Telford

About the Risk

Risk rating

C

Default rate

14.10%

Bad debt rate

5.04%

About the Security

Security Offered:

All Assets Debenture - Fixed and floating charge over the business

Est. Equity: 0.00

Personal Guarantee - PG from Lagiharan SUBRAMANJAM

Est. Equity: 0.00

Risk Indicators Identified:

Low Security Coverage
The security offered on this loan is below desirable levels
Business acquisition
This loan is to fund a business acquisition. The experience of the purchasers should be considered.
Disclosures
This listing contains disclosures from ReBS. Lenders are encouraged to read them in the profile tab

Important Files

Who are we?

Lagiharan SUBRAMANJAM is looking to acquire a new 15 year lease of a convenience store premises situated in Ketley, Telford. The purchase is on the back of the imminent retirement of the current owners with the vehicle for this acquisition being LS DELTA LIMITED.

Lagiharan has marshalled his own cash resources together with assistance from the family to produce a sizeable deposit towards the purchase price. Personal bank statements which have been sent to ReBS evidence well conducted accounts held with NatWest Bank. Whilst Lagi has not run a business before, he has 5 years’ hands on experience as a manager in the convenience stores sector. His CV detailing his skills and 5 years management experience is duly attached.

Read more

Loan Offers

What is the loan for?

A loan of £32K is sought to purchase the assets of an existing convenience store located in Ketley, Telford.

A purchase price of £60K has been agreed with the vendor. The vendor has agreed to a deferred consideration structure and £20K of this £60K will be paid over a 36 month term at a flat £555 per month.

This is an asset purchase only. A total purchase price of £60,000 has been agreed (with £20,000 being deferred over 36 months). For this price, £3000 of shop equipment and £57,000 in goodwill (to include a new 15 year lease) will be purchased. Stock at value is also being acquired separately estimated at £10,000.

The client has £25K in cash that he is introducing himself and ReBS lenders are being asked for a loan of £32K. £40K of this combined figure will be used for the initial purchase price, £10K will be used to purchase stock at value. The remaining £7K will be used as working capital.

Why consider investing?

Easy car parking exists for a convenience store selling a full range of household goods as well as cigarettes and alcohol, news and lottery. The financials are attached for the last 3 years and analysed below and whilst run successfully, there are a number of potential and obvious improvements to be made under new ownership around modest sales uplifts through new product lines and enhanced margins.

Year 2018 2017 2016
Sales £276214 £233405 £113270
GP £45452 £38830 £17909
GPM 16.5% 16.6% 15.8%
Other Income £6009 £3267 £3651
Overheads (£29885) (£25599) (£9627)
Net Profit £21576 £16498 £11933

GPM has been relatively steady reflecting the way that both the business and the accounts have previously been managed and clearly below what one would normally expect in the sector. NPBT varies between £12K and £22K, adequate to provide margin to service debt at say £9600 per annum. Sales are anticipated to rise and margin improve under dynamic new management.

Security may be limited to a debenture over the company's assets which will pick up goodwill, the leasehold interest and stock added to unsupported PGs, but comfort will have to derive from the fact that the couple are putting all of their resources into the business bar a marginal cash reserve, clearly evidencing the commitment to make this work. We recognise that this loan could be perceived as being, in effect, unsecured.

Security

A personal guarantee will be taken from the director, Mr Subramanjam, and a debenture will be taken over the company.

Mr Subramanjam is not a homeowner, and so has a negligible personal net worth.

A first priority debenture will be taken over the business which will create a fixed and floating charge over the business. This will capture all assets of the business including the stock, the leasehold interest and goodwill.

ReBS Disclosure

1. There is insufficient security to be confident of a recovery in the event of default. The guarantor is not a homeowner and as a result the PG would be useful mainly just as a tool to bring a reluctant debtor to the table or by way of an income payment order should we need to proceed to bankruptcy. The debenture will be first priority and will cover all of the business’ assets, however given the nature of the business, this would really only comprise of stock and the leasehold interest.

ReBS Disclosure

2. The applicant has agreed to supply ReBS with a monthly report on the turnover of the business and bank statements for the first six months of the loan. This will be used to analyse the performance of the business following acquisition and ascertain whether the growth of the business is proceeding as planned.

ReBS Disclosure

3. The accounts presented for this application are from the partnership. As such, they do not have to conform to the various statutory requirements set out in the Companies Act 2006 and the companies and groups. regulations.

DateAmountCapitalInterestReceived
22/07/2018£913.26£346.83£566.43
22/08/2018£913.26£352.47£560.79
22/09/2018£913.26£358.21£555.05
22/10/2018£913.26£364.03£549.23 (31 days late)
22/11/2018£913.26£369.95£543.31 (67 days late)
22/12/2018£913.26£375.97£537.29 (41 days late)
22/01/2019£531.17£0.00£531.17Interest only
22/02/2019£531.17£0.00£531.17Interest only
22/03/2019£913.26£382.09£531.17 (10 days late)
22/04/2019£913.26£388.30£524.96 (15 days late)
22/05/2019£518.64£0.00£518.64Interest only
22/06/2019£913.26£394.62£518.64
22/07/2019£913.26£401.04£512.220 days overdue
22/08/2019£913.26£407.56£505.70Not Due
22/09/2019£913.26£414.19£499.07Not Due
22/10/2019£913.26£420.93£492.33Not Due
22/11/2019£913.26£427.78£485.48Not Due
22/12/2019£913.26£434.74£478.52Not Due
22/01/2020£913.26£441.81£471.45Not Due
22/02/2020£913.26£449.00£464.26Not Due
22/03/2020£913.26£456.30£456.96Not Due
22/04/2020£913.26£463.72£449.54Not Due
22/05/2020£913.26£471.27£441.99Not Due
22/06/2020£913.26£478.93£434.33Not Due
22/07/2020£913.26£486.72£426.54Not Due
22/08/2020£913.26£494.64£418.62Not Due
22/09/2020£913.26£502.69£410.57Not Due
22/10/2020£913.26£510.87£402.39Not Due
22/11/2020£913.26£519.18£394.08Not Due
22/12/2020£913.26£527.62£385.64Not Due
22/01/2021£913.26£536.20£377.06Not Due
22/02/2021£913.26£544.93£368.33Not Due
22/03/2021£913.26£553.79£359.47Not Due
22/04/2021£913.26£562.80£350.46Not Due
22/05/2021£913.26£571.96£341.30Not Due
22/06/2021£913.26£581.26£332.00Not Due
22/07/2021£913.26£590.72£322.54Not Due
22/08/2021£913.26£600.32£312.94Not Due
22/09/2021£913.26£610.09£303.17Not Due
22/10/2021£913.26£620.01£293.25Not Due
22/11/2021£913.26£630.10£283.16Not Due
22/12/2021£913.26£640.35£272.91Not Due
22/01/2022£913.26£650.77£262.49Not Due
22/02/2022£913.26£661.35£251.91Not Due
22/03/2022£913.26£672.11£241.15Not Due
22/04/2022£913.26£683.05£230.21Not Due
22/05/2022£913.26£694.16£219.10Not Due
22/06/2022£913.26£705.45£207.81Not Due
22/07/2022£913.26£716.92£196.34Not Due
22/08/2022£913.26£728.59£184.67Not Due
22/09/2022£913.26£740.44£172.82Not Due
22/10/2022£913.26£752.48£160.78Not Due
22/11/2022£913.26£764.72£148.54Not Due
22/12/2022£913.26£777.16£136.10Not Due
22/01/2023£913.26£789.81£123.45Not Due
22/02/2023£913.26£802.65£110.61Not Due
22/03/2023£913.26£815.71£97.55Not Due
22/04/2023£913.26£828.98£84.28Not Due
22/05/2023£913.26£842.47£70.79Not Due
22/06/2023£913.26£856.17£57.09Not Due
22/07/2023£913.26£870.10£43.16Not Due
22/08/2023£913.26£884.25£29.01Not Due
22/09/2023£913.26£898.64£14.62Not Due
Total:£34,819.99£21,556.59