Case Study: Solving a Start-Up Cash Flow Crunch at Month Five of Trading

A Midlands-based logistics start-up approached Somo for a Secured Business Loan after encountering a short-term cash flow challenge during a critical stage of its growth journey.

Having been trading for just five months, the business had already secured a major contract that represented a significant opportunity to establish itself in a competitive market. The contract had the potential to generate substantial revenue and provide a strong platform for future growth. However, before work could begin, the company faced an immediate funding requirement to ensure it could meet payroll and continue operating smoothly.

As is often the case with new businesses, the company's limited trading history created difficulties when seeking finance through traditional channels. Despite having a clear growth trajectory and a valuable contract ready to commence, the business was declined by several lenders due to its short operating track record. Its bank was also unable to provide funding within the timeframe required.

Without access to capital, the company risked missing payroll obligations and jeopardising the delivery of its new contract. The directors needed a funding partner that could move quickly and assess the wider opportunity rather than relying solely on historic trading records.

The Challenge

The business required funding to:

• Meet payroll commitments during a temporary cash flow gap

• Support operations ahead of a major contract launch

• Maintain business continuity during a key growth phase

• Avoid delays that could impact customer relationships

• Secure funding despite having only five months of trading history

Traditional lenders were unwilling or unable to provide the flexibility and speed needed, placing the contract and future growth plans at risk.

The Solution

Somo took a pragmatic view of the transaction, focusing on the strength of the opportunity and the available security rather than the company's limited trading history.

Using a commercial property as security, Somo provided:

Loan Amount	£102,000
Rate	8.9% p.a.
Term	3 months
Completion Time	11 days

The streamlined process allowed the business to access funding quickly without the delays and complexity often associated with traditional lending applications.

The Outcome

By providing a fast and flexible funding solution, Somo helped the business overcome a temporary cash flow challenge and focus on delivering its new contract successfully. The loan bridged a critical gap at a pivotal stage in the company's development, allowing the management team to concentrate on growth rather than funding concerns.

For a young business with limited trading history, access to timely funding made all the difference. With payroll secured and the contract underway, the company was able to continue building its reputation, strengthen its market position and create a solid foundation for future expansion.