Ventilation
Money makes the fan go around
England rugby legend Jeremy Janion runs a thriving ventilation company based in Twickenham and with the help of peer-to-peer, fixed-term business loans specialist ArchOver, he believes he has found the key to future success and expansion
Finance matters Jeremy Janion (right) runs a ventilation company providing installations into residential buildings T
wickenham-based Ventalution specialises in the provision and installation of ventilation systems for residential buildings. It has
developed a range of solutions for complying with part F of the Building Regulations ranging from specifying high performance fans through to integrated apartment systems, which can incorporate heat recovery systems and central extract systems. The now thriving company was founded in 2000
by the company’s owner and chairman, England Rugby legend Jeremy Janion, who soon realised that he was in a business that required large amounts of working capital and traditional sources of finance were not proving receptive. That’s when he began a long and successful relationship with peer-to-peer, fixed-term business loans specialist ArchOver. Says Jeremy: “It is only when you begin running
your own company that you realise that obtaining the right finance is as much part of the ventilation and construction industries as high standards of engineering and having a good sales organisation. Without having enough working capital, we simply could not tackle large projects.” For a recent major contract at a two-building development in Putney, ArchOver provided a further £175,000 loan for working capital. Ventalution has installed heat recovery ventilation in a total of 108 high-spec residential apartments, above two floors of retail development. This entailed the installation of a NuAir MRX Box W1 unit in each flat, a total of three and a quarter kilometres of plastic air ducting and accompanying intake and outlet grilles. To comply with modern building regulations, the
March 2017
ventilation systems had to exchange internal air with fresh outside air at a minimum tick-over level, operating 24 hours per day, of 9 L/s extracted from the kitchen and 6 L/s from the bathroom. This has to be capable of being boosted to 8 L/s in the bathroom when the light is switched on and 13 L/s in the kitchen when boost is engaged. The units extract heat from this outgoing air and transfer this to an equal amount of fresh air going into the living rooms and bedrooms. ArchOver’s first involvement with Ventalution was
the provision of a two-year loan for £300,000, which gave the company the ability to fund major ventilation projects without losing control of the business or risking having the loan withdrawn before term. Says Jeremy: “Over the past two years the building industry has really come alive with high-rise buildings going up all over the place. During that time our payments due have grown from £600,000 to £1.6m. “To cover this, we have gone back to ArchOver again and again, and it has always come through for us. Our latest loan brings our total borrowing through ArchOver to £825,000. “Occasionally we have a spike in work and we just
go to ArchOver for a £100,000 loan for just three months and its lenders usually fully fund it in hours.” For a company such as Ventalution, while winning a
large contract is obviously good news, it also means huge demands on the company’s resources before a penny comes in from the customer. For example, while large contracts will have staged payments, it still means that components have to be bought and transport, salary and overhead costs found; all before any payment comes in from the client. This is where adequate working capital comes in,
ArchOver’s peer-to-peer platform uses money from its individual investor clients and lends directly to borrowers, minimising the investment risk by ensuring that each borrower is funded by numerous investors, which each risk a comparatively small amount. To increase security, ArchOver, on behalf of its lenders, takes a first floating charge over the trade debtors through accounts receivable, and the borrower takes out credit insurance with ArchOver jointly insured. This leaves the rest of the balance sheet free, so borrowers can access other forms of finance should they need it. Importantly, it does not demand personal guarantees and allows businesses to plan for the future. This system provides a higher interest rate
for investors than they could get elsewhere, and provides borrowers with low cost finance with fewer restrictions. ArchOver has just launched a new loan service called Secured & Assigned, which arranges loans secured against future contracted revenue, with ArchOver taking assignment of all recurring contracts. This gives companies with service and maintenance contracts the ability to use them as security.
the lack of which is one of the main causes for the failure of otherwise viable companies. Jeremy initially turned to the High Street banks, but their new-found nervousness over lending, following the banking crisis, meant they were not prepared to advance the money on acceptable terms and now Brexit fears have added to their reticence. Ventalution’s sales continued to grow, leaving it in need of additional working capital to meet the new orders, so it turned to ArchOver for an additional £250,000 loan. Says Jeremy: “Sales had trebled in 12 months but we wanted cash to fund our debtors’ book which over Christmas rocketed from £375,000 to almost £900,000. The loan largely alleviated the problem.”
www.heatingandventilating.net
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