Wholesale distributors of food equipment, Sephra Europe has secured a £500k five-year unsecured loan through Caple, the alternative SME credit specialist.
Sephra has used the loan to purchase the IP of its branded products, previously held by a US firm, giving the company full control of these items. By removing the need to pay royalties, Sephra now also retains all profits from each sale.
Sephra will also use the loan to drive product innovation and expand internationally. For instance, the business created a self-service popcorn maker for supermarket Asda. It now sells more than one million tubs of popcorn a year in the UK. Sephra aims to replicate this success with further retailers worldwide.
As a result, Sephra expects to hire a further 10 people and more than double its turnover to £10m over the next three-to-four years.
SMEs such as Sephra typically have difficulties raising money without having tangible assets to put up as security to banks. That can mean they instead have to make personal guarantees or dilute their ownership by issuing equity.
Caple is the first in the UK to provide access to unsecured lending based on the future cash flows of the SME. The business requires no collateral or personal guarantees as security.
David Archer, managing director of Sephra, said, “We wanted to move quickly, secure the IP rights to our products and to press ahead with our growth plans. The Caple team understood our business and responded by completing the deal in record time.
“We are now able to drive innovation and expand into 20 to 30 new markets across Asia, Australasia, Central and South America, providing huge growth potential. By removing the need to pay royalties, we’re already seeing a positive impact on the bottom line.”
Dominic Buch, co-founder and managing partner of Caple, said, “Successful SMEs such as Sephra need funding to reach their full potential. The flexible nature of the loans we offer access to helps businesses like Sephra achieve their goals without the need for personal guarantees.
“By working alongside Sephra’s bank, we have supported a blend of financing that delivers stable and long-term funding that enables it to implement its ambitious growth plan.”
Based in Kirkcaldy, on the east coast of Scotland, Sephra is a wholesale distributor of food equipment selling to restaurants, cafes and hotels groups, as well as local catering distributors. The company, which aims to bring a sense of fun and theatre to food, exports to 67 countries globally.
Sephra has grown by innovating and expanding its product range. Starting with chocolate fountain machines, the business now distributes waffle, pancake, donut and popcorn makers. The business also sells Sephra ingredients including chocolate, add water only waffle mix and crepe mix. Last year, the business sold over 300 tonnes of chocolate.