Stirling Chase’s £1.35m acquisition facility

On 15 July 2014 the former CreditSquare reported arranging a £1.35 million facility for Stirling Chase. The term was three years. The money part-funded the acquisition of a facilities management business. The senior loan was secured on assets of both Stirling Chase and the target. GLI Finance invested alongside participants on ThinCats, then a peer-to-peer lending marketplace.

What the figure describes

The announcement identified the amount and term of the borrowing. The size of a facility answers a different question from the value placed on a target company. Acquisition funding can include money for completion costs or leave some of the consideration payable later. Nothing in the reported term alone tells a borrower how much principal fell due in each month.

For a comparable decision today, a buyer can draw up a table of cash due on completion, the buyer’s own contribution and the amount sought from a lender. The acquisition guide works through that calculation. Other historical transactions illustrate how direct lenders and advisers played different roles.