RIAD IMPORTERS LIMITED

Funds Raised

£44,000.00

Final AER

19.70%

Loan term

60 MONTHS

Auction Closed

2018-07-31

Micro Loan Opportunities
Buy Capital Seller's
Premium
Price Buyer's
Rate
BuyBack
£130.60 +15.00% £150.19 12.26%
£17.41 +15.00% £20.02 12.26%

About the Business

Company Name: RIAD IMPORTERS LIMITED Company Number: 08663084
Business Type: Years Trading:
Business Location: Croydon

About the Risk

Risk rating

C

Default rate

13.30%

Bad debt rate

5.47%

About the Security

Security Offered:

Personal Guarantee - PG from Jeremiah Riad

Est. Equity: 0.00

All Assets Debenture - Fixed and floating charge over RIAD Importers Limited

Est. Equity: 0.00

Risk Indicators Identified:

Low Security Coverage
The security offered on this loan is below desirable levels
Seasonal
This business has been identified as being seasonal and as such may struggle to meet financial obligations in quiet seasons
Notable Dividends Taken
More than 50% of Net Profit has been taken as dividends within at least one of the assessed periods
Disclosures
This listing contains disclosures from ReBS. Lenders are encouraged to read them in the profile tab

Important Files

Who are we?

Riad Importers Limited was formed in August 2014 when its founder, sole director and shareholder, Jeremiah Riad, was still studying Economics at Durham University. Jerry, in effect, followed his father into the wholesale fruit and vegetable industry, his Dad having been 30 years, man and boy, working on Covent Garden and New Spitalfields markets in London.

Riad Importers Limited imports fresh produce into the UK selling from a rented stand at New Spitaflields, sub let by a leaseholder. Product is also distributed via a network of suppliers and stands in other wholesale markets in the UK. Product range is broad including salads, fruits, exotics, but the company’s focus since 2016 has been in sourcing niche product directly from growers. Examples include yams, sourced to supply, in large part, the Afro Caribbean markets. Yams traditionally have come from Ghana and South America, but Jerry has sourced directly from Nigeria to take advantage of high quality produce being produced at lower prices due to over supply within Nigeria itself and the government there encouraging growers to export. Yams also have the overriding advantage,of enjoying a long shelf life, typically up to 4 weeks, unlike most product in the fruit and vegetable market, mitigating the risk of wastage. Margin is strong. Bought at £10.50 per box, this is sold at, typically, between £17 and £20. Another niche activity area is high quality fresh peanuts, sourced from Egypt, competing with product historically sourced largely from Uganda and Pakistan with inconsistent quality. Again, margin is strong, costing £18 per bag and sold at between £28 and £30.

As well as wholesaling at New Spitalfields, 2017 saw the introduction of a distribution strand to the business delivering daily into restaurants throughout London, again with concentration on the Afro Caribbean market place which remains under served Opportunities are now presented to have product grown to order mainly in Egpyt but also in Morocco, again enabling new product lines e.g habaneros, different varieties of passion fruit as well as facilitating increased margins.

Read more

Loan Offers

What is the loan for?

In the last year, it has become increasingly apparent that the trading space rented at New Spitalfields is too small to accommodate the growing business activity, growth having come from product diversification, innovative new supply chains and, as the company’s financial performance has improved, access to credit insurance markets, making it more attractive for exporters to deal with the company. Riad Importers Limited currently pays £60K per annum to rent its stand which consists of sales and storage / refrigeration areas. The lack of space is directly constraining growth, hampering, for example, the onboarding of the Egyptian and Moroccan growers referenced earlier. To that end, the company is looking to buy its own space on New Spitalfields on a new 10 year lease. This will, simultaneously, allow for growth, but, also deliver reduced rents .Rent charges of £60K will be replaced with £11K rent and service charge of £24K leaving a net positive impact, pre financing costs of £25K, thus the adjusted EBITDA calculations that follow The stand will cost £80K and a loan of £43K is sought over a 5 year term.

Why consider investing?

Financial performance can be summarised as follows:

Year 10/2016 10/2017 04/2018 (YTD)
Sales £600K £813K £729K
GP £90K £135K £118K
GPM 15% 16.6% 16.2%
NPBT £19K £36K £28K
Rent Add Back (£36K) (£60K) (£45K)
EBITDA £57K £96K £73K
New Rent £35K £35K £35K
New EBITDA £22K £61K £38K

Serviceability is clearly evidenced in historic and ytd figures. Cash and profit budgets are also attached to the proposal forecasting 40% + growth year on year.

As security, the guarantee of the sole director and shareholder, Jeremiah Riad, is offered. Jeremiah is, however, a non home owner and there is little if any value that attaches to that guarantee. This is, accordingly, a debenture led lend with a fixed and floating charge over the company’s assets also offered. Comfort will derive, therefore, from the inherent value in the 10 year leasehold interest in the stand at New Spitalfields, which is perceived to hold its value as the lease is renewable with a ready market for other stand holders who currently sub let to acquire the asset in a distress situation.

Security

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

Mr Riad 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 a small amount of stock and the leasehold interest.

ReBS Disclosure

2. The applicant has agreed to supply ReBS with monthly management information on the turnover and profit of the business for the first six months of the loan. This will be used to analyse the performance of the business and ascertain whether the growth of the business is proceeding as planned.

ReBS Disclosure

3. The applicant has agreed to allow ReBS legal team to review the new draft lease before the release of funds. This will allow us to ensure that the right of assignment or sub-letting are contained in the document provisions which will be the primary avenues we would look to pursue in the event that the business were to fail.

DateAmountCapitalInterestReceived
28/08/2018£1,158.32£436.10£722.22
04/10/2018£1,158.32£443.26£715.06
04/11/2018£1,158.32£450.54£707.78
04/12/2018£1,158.32£457.93£700.39
04/01/2019£1,158.32£465.45£692.87
04/02/2019£1,158.32£473.09£685.23
04/03/2019£1,158.32£480.85£677.47
04/04/2019£1,158.32£488.75£669.57
04/05/2019£1,158.32£496.77£661.55
04/06/2019£1,158.32£504.92£653.40
04/07/2019£1,158.32£513.21£645.11
04/08/2019£1,158.32£521.64£636.68
04/09/2019£1,158.32£530.20£628.12Not Due
04/10/2019£1,158.32£538.90£619.42Not Due
04/11/2019£1,158.32£547.75£610.57Not Due
04/12/2019£1,158.32£556.74£601.58Not Due
04/01/2020£1,158.32£565.87£592.45Not Due
04/02/2020£1,158.32£575.16£583.16Not Due
04/03/2020£1,158.32£584.60£573.72Not Due
04/04/2020£1,158.32£594.20£564.12Not Due
04/05/2020£1,158.32£603.95£554.37Not Due
04/06/2020£1,158.32£613.87£544.45Not Due
04/07/2020£1,158.32£623.94£534.38Not Due
04/08/2020£1,158.32£634.18£524.14Not Due
04/09/2020£1,158.32£644.59£513.73Not Due
04/10/2020£1,158.32£655.17£503.15Not Due
04/11/2020£1,158.32£665.93£492.39Not Due
04/12/2020£1,158.32£676.86£481.46Not Due
04/01/2021£1,158.32£687.97£470.35Not Due
04/02/2021£1,158.32£699.26£459.06Not Due
04/03/2021£1,158.32£710.74£447.58Not Due
04/04/2021£1,158.32£722.40£435.92Not Due
04/05/2021£1,158.32£734.26£424.06Not Due
04/06/2021£1,158.32£746.31£412.01Not Due
04/07/2021£1,158.32£758.56£399.76Not Due
04/08/2021£1,158.32£771.01£387.31Not Due
04/09/2021£1,158.32£783.67£374.65Not Due
04/10/2021£1,158.32£796.53£361.79Not Due
04/11/2021£1,158.32£809.61£348.71Not Due
04/12/2021£1,158.32£822.90£335.42Not Due
04/01/2022£1,158.32£836.40£321.92Not Due
04/02/2022£1,158.32£850.13£308.19Not Due
04/03/2022£1,158.32£864.09£294.23Not Due
04/04/2022£1,158.32£878.27£280.05Not Due
04/05/2022£1,158.32£892.69£265.63Not Due
04/06/2022£1,158.32£907.34£250.98Not Due
04/07/2022£1,158.32£922.23£236.09Not Due
04/08/2022£1,158.32£937.37£220.95Not Due
04/09/2022£1,158.32£952.75£205.57Not Due
04/10/2022£1,158.32£968.39£189.93Not Due
04/11/2022£1,158.32£984.29£174.03Not Due
04/12/2022£1,158.32£1,000.44£157.88Not Due
04/01/2023£1,158.32£1,016.87£141.45Not Due
04/02/2023£1,158.32£1,033.56£124.76Not Due
04/03/2023£1,158.32£1,050.52£107.80Not Due
04/04/2023£1,158.32£1,067.76£90.56Not Due
04/05/2023£1,158.32£1,085.29£73.03Not Due
04/06/2023£1,158.32£1,103.11£55.21Not Due
04/07/2023£1,158.32£1,121.21£37.11Not Due
04/08/2023£1,158.32£1,139.62£18.70Not Due
Total:£43,999.99£25,499.21