A growing UK-based healthcare business secured a new contract with the NHS, creating a significant opportunity for expansion. However, like many organisations entering large public-sector agreements, the business faced upfront mobilisation costs and a delay between delivering services and receiving payment.
The Challenge
The business required funding to:
- Cover initial staffing and operational costs
- Manage cash flow during the early stages of the contract
- Bridge the gap before NHS payments began to flow consistently
While revenue projections were strong, the contract had only recently gone live, meaning income was not yet reflected in the bank statements. Additionally:
- The business had been trading since 2023
- The director was not a homeowner, limiting access to some lower-cost lenders
- Longer-term funding (3–6 years) was not immediately available
The Solution
After exploring the full market, a short-term, flexible loan facility was arranged:
- Facility Amount: £260,000
- Term: 24 months
- Structure: Amortising loan with no early repayment penalties
- Flexibility: Interest charged only on the outstanding balance
This provided the business with immediate access to working capital, allowing them to confidently mobilise the contract.
Why This Worked
- Immediate liquidity: Funds were available quickly to support operational rollout
- Flexibility: The ability to overpay or settle early helped manage overall borrowing costs
- Right-fit structure: Although shorter than initially desired, the 24-month term aligned with the business’s early-stage cash flow profile
Outcome & Future Strategy:
The funding enabled the business to:
- Successfully launch and deliver the NHS contract
- Maintain stable cash flow during the critical early months
- Focus on growth without operational disruption
As contract income becomes consistent and is evidenced in the accounts, the business is expected to:
- Refinance onto a longer-term, lower-cost facility, or
- Introduce invoice financing to support ongoing cash flow
For businesses entering new contracts – particularly within the NHS – short-term funding can act as a strategic bridge, providing the stability needed during mobilisation before transitioning to more cost-effective, long-term solutions.
