Polestar is delighted to announce that it has completed a £3.75m refinancing for dedicated education sector arts and crafts business, Dryad Creative.
One month to the day from completing an MBO of the business, new CEO, David Edwards, and the rest of the management team faced the closure of all schools, over 80% of their business: If the Covid situation has highlighted one thing, it is the value of ensuring a business maintains strong funding headroom for the unforeseen (or, as we refer to it in 2020, the unprecedented!). Alongside this, given the sharp drop in revenue, the ability to buy time to secure a long-term solution through swift, concerted management action to manage cashflow and preserve liquidity has proven key.
Existing funder, BNP, was quick to support with deferrals of interest and capital, though CBILS was less straightforward to secure, despite the business being exactly what you imagine the Government was seeking to support through the scheme.
Having initially approached and been declined by CBILS funders with links to the business (both of whom were supportive up to credit sanction stage), we were fortunately able to engage with newly sanctioned CBILS lender, Arbuthnot, who knew the business having offered terms on the MBO itself. This, together with a comprehensive update pack, allowed them to rapidly understand the commercials and, with a short credit process, they were able to provide terms in under a week and progress to funds in less than a month.
New CEO David Edwards commented: “It has certainly not been the smooth ownership transition I had envisaged in February, but we are fortunate to have an excellent team, both inhouse and within the wider stakeholder group, who all recognised the strong commercial position of the business. We are grateful to the existing funders who extended support, suppliers for a degree of flexibility on payments and to both our advisors at Polestar and the Arbuthnot team for their prompt and balanced approach to securing a comprehensive refinancing package.”
Richard Hall, who led the refinancing from Polestar, commented “James Marler and the team at Arbuthnot have been a pleasure to work with. With easy access across their team, we were quickly able to find commercial solutions to any concerns and secure funding in a tight timeframe. CBILS has not proved easy to secure in all cases but this deal has proved that with the right party it can do exactly what was presumably envisaged, providing rapid funding to creditworthy businesses suffering from a short term Covid impact.”