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Alternative finance secures future of Mumbles Pier

22nd Jun 2018   ·   The ThinCats Team   ·   Funding Stories

A 19th-century icon of the Welsh coast is being developed for the 21st century, thanks to funding from alternative finance provider ThinCats.

The Mumbles Pier near Swansea was built in 1898 and has been owned by the same family business, now run by John Bollom, since the 1930s. The Bollom family had already carried out considerable work on the pier, with works in keeping with its original Victorian grandeur, including an upgraded beach hut café and a premium fish restaurant, Copperfish, which opened in April last year.

The owners were looking for more finance to complete the major upgrade to the pier’s girder structure and replace and finish the railings and walkways. However, financing this important work was proving tricky, as the firm’s managing director, Fred Bollom, son of John, explains: “We had surpassed all targets with our existing bank loan and were keen to keep improving our visitor facilities. Our bank wanted to see more cash left in the business and seemed to be fighting the old battles from 2007-8. We’re an unusual, asset-heavy, business and found not many banks wanted to lend to rebuild a Victorian pier.”

Photograph of the entrance to Mumbles Pier

Laurence Payne, business development director at HCF Corporate Finance, had been working with the Bollams to source funds for the project. He, too, was frustrated by the attitude of high street banks: “In this instance,” he says, “some of the mainstream lenders had reservations about the somewhat complex security position, in addition to which, they were reluctant to lend against projections, despite solid historic trading results.”

The banks’ reluctance was despite a reliable income stream going back decades from a variety of sources, from amusements, cafes and bars, and that promised to be diversified further through the development. The Bolloms therefore went looking for alternative forms of finance, from a lender that understood the strengths and needs of their business better.

They arrived at a beauty parade – as might be appropriate for a pier – of potential lenders, from which they chose ThinCats.

The Bollom’s accountant, MHA Broomfield Alexander, worked with HCF to present the project financially, plus source and review various lenders. Katherine Broadhurst, associate director at the accountants, says: “ThinCats were flexible about how they thought of the deal, were able to capture what the client wanted, and through a quick offer allowed the client to proceed at the pace they needed to.”

ThinCats business origination director Alison Whistance (who covers the M4 corridor from South Wales to Reading) explains how the relationship developed: “In the early stages of our discussions I introduced Simon Brook, ThinCats’ head of credit, to the borrower and we visited the site together to discuss the plans and funding needs. Getting our credit team involved early in the process has a big impact on certainty of funding and speed of execution”

HCF’s Laurence Payne says he was “delighted to introduce ThinCats who stepped in and provided a thoroughly flexible and pragmatic approach in structuring the deal.  They proved to be quick and efficient throughout the whole process which was, in no small way, due to the diligence of Alison Whistance.”

Mumbles Pier

Aside from speed, ThinCats’ taking the time to understand the business, its owners and their strategy makes a crucial difference, providing a solution that works for both borrower and lender. Throughout the process, communication was continuous between ThinCats and the family firm.

Britain’s SMEs often find agreeing loans a tortuous and lengthy business, but this took two months, from start to finish. Fred Bollom says he found dealing with ThinCats “a total sea-change: much better than dealing with high street lenders, as ThinCats appraise the whole business and make a decision based on that, not just on what you can put on a loan application form. It’s like what banks used to do, but not anymore.”

Kevin Thomas, director at the Bolloms’ solicitor Morgan Laroche, said: “It’s such an unusual property set-up, and ThinCats showed an impressive understanding for the current and future lending requirements,” adding that the lender’s “empathy for the development requirements stood out”.

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ThinCats provided £1.6m to both refinance the existing bank loan and carry forward the renovation. Finance secured, the Bolloms can now complete the pier stem works and planning permission for the development sites. After this, the plan is to create a 150-seater function suite in the current bowling alley room and further develop the retail offering on the pier.

The funding is a significant boost to the local economy, with everything being sourced from businesses in the area, from electricians from the Mumbles to shopfitters and architects from Swansea. The planning adviser is a (very slight) exception, coming in from Cardiff.

Commenting for ThinCats, Alison says: “The Mumbles Pier has been a historic coastal landmark of South Wales for the past 120 years and we are very pleased to have been chosen as the funding partner to support this development. The recent expansion of the retail offering has already seen increased visitor numbers to the pier and adjoining beach and the funded pier works will help restore this popular destination to its former glory.”

Though this was the first deal the accountants had done with ThinCats, Katherine Broadhurst says that the lender is now “an important option for our clients in the market, particularly those with more complex lending requirements”. HCF’s Laurence Payne agrees: “ThinCats will be first on my call list for similar deals.”

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