When traditional streams fell short, former England rugby player Jeremy Janion found a different source of funding to grow his business.
Location: Twickenham, London
Number of employees: circa 65
Specialism: High-rise ventilation supply and install
Jeremy Janion needed working capital to grow his business, but the traditional avenues of lending weren’t bearing fruit.
“We all know the story with the banks at the moment,” he says. “So I needed to look elsewhere.
“I had a look at factoring and peer-to-peer lenders like Funding Circle, but they had some limits that didn’t suit me.”
In the end, he settled on P2P lender ArchOver, which has a different model to Funding Circle.
“It’s worked very smoothly so far,” he says – and his business, Ventalution, has seen its turnover quadruple in the past 18 months thanks to the funding ArchOver has supplied.
Mr Janion was formerly an international rugby union winger, winning 12 senior caps for England between 1971 and 1975.
An accountant by training, he was involved in a number of different businesses following his rugby career, before helping set up Ventalution in 2000.
“We supply and install ventilation systems for new-build, high-rise residential apartment blocks, mainly within the M25,” he says.
“I’d love to say our growth is exclusively down to the fact that we’re so good, but it’s also definitely been helped by the rate of housebuilding in London”
Jeremy Janion, Ventalution
“We originally manufactured too, but soon realised we couldn’t compete with the established players in that space, so focused instead on supply and install.”
The firm’s turnover is approximately £3m, rising sharply in the past four years.
“I’d love to say our growth is exclusively down to the fact that we’re so good, but it’s also definitely been helped by the rate of housebuilding in London,” Mr Janion says.
With the company growing, Mr Janion approached ArchOver for an initial £300,000 loan, which was granted.
“I actually came across them after reading an article in the Daily Mail,” he says.
ArchOver offers a number of different options for funding, but Mr Janion applied for their Trade Loan option, which secures and insures the loan against the borrower’s accounts receivable.
“ArchOver examines your debtor book and insures a loan for up to 80 per cent of its value,” he says.
The cost to Ventalution is the interest rate on the loan, plus the cost of the insurance premium.
The money comes from a mixture of individual and corporate investors.
The term period for Ventalution’s loan is two years, after which the loan has to be paid back in full.
“We took a second tranche of £250,000 as well, and we’re now happy to talk about a third one if need be,” he says.
Mr Janion says the process has gone “smoothly” for his firm so far, with only one small wrinkle.
“It’s nothing to do with ArchOver, but there is a three-week cooling-off period in place after being granted the loan, which is worth bearing in mind,” he says.
“I couldn’t expect us to quadruple again in the next 18 months like we just have, but I do expect growth to continue”
Jeremy Janion, Ventalution
The founder expects to see growth continue over the next two to three years, especially in Ventalution’s primary market of London.
“I couldn’t expect us to quadruple again in the next 18 months like we just have, but I do expect growth to continue,” he says.
“There are certainly no signs of the growth in London slowing over the next two to three years, especially with the amount of housing being built in the high-rise apartment blocks that we work in.”
Mr Janion has not got immediate plans to expand the business outside the M25, but is watching other regions closely.
“I’ve been keeping an eye on other places – Manchester is also seeing a lot of high-rise housing,” he says.
“With our growth we’ve invested more in our senior management team, so we do now have increased capability to look at other markets.”
For future growth, Mr Janion is certainly considering continuing to use alternative financing, but insists that bank lending will “always be an option” if their reticence recedes to previous levels.
He is, however, happy with the funding options he’s used so far.
“I think it certainly knocks invoice factoring into a cocked hat, as that comes with so much extra aggravation,” he says.
“And the banks always want personal guarantees or collateral.
“The clever bit with this is that the debt is insured, meaning the insurer stands in for the collateral and the borrower just has to pay the premiums and the interest.”
It’s clear that this version of P2P lending has benefited Ventalution’s growth and helped it get bigger.
Without alternative financing, this SME’s growth may well have been hampered.