Sky Gardens, Toddington, Cheltenham

Loan recipient, Fredericks Gloucestershire (previously GDLF - Gloucestershire Development Loan Fund)

Sky Gardens applied for £20,000 from Fredericks in early 2009 to cover a cashflow shortfall, and they drew the loan down in March.

Managing director Steve Raftery explains, “For years we had specialised in stabilising embankments and other grassed constructions for councils, architects and private householders. But we found there was a growing demand for green roofs and walls as part of the building process. We set up a separate arm, Sky Gardens, to focus on this aspect of the business.

“Green roofs have many benefits, from maintaining regular cool temperatures inside buildings to controlling the run-off from rain, thereby lessening the pressure on drainage. Energy bills can be cut dramatically as energy loss is minimised, and we found we were working with all sizes of projects from one-off garden sheds to roofing Europe’s largest green storage facility, the Adnams Brewery in Suffolk.” (pictured)

In the early days Sky Gardens had a staff of seven and the first year’s turnover was around £1m. That grew to £1.7m in year two, with a third year forecast of £2.5-£3m. They now directly employ 14 staff, and have banks of regular suppliers and contractors who have worked with them from the beginning.

Traditionally the business enjoyed a three-week closedown at Christmas, which hadn’t caused any problems previously. But 2009 started with weeks of freezing weather and late snow, putting back several weeks’ worth of orders.

“Our order book was full. We were sitting on £500k-worth of orders but the two months of downtime started biting hard.

“We still had to pay staff and cover our overheads, which amounted to around £50k over that period. Our bank had not been otherwise unhelpful (as we know many have been during the downturn), but in this case decided that they couldn’t help with a loan to see us through.

“We started to worry – this money was needed to keep the business afloat. A book full of future orders is no help paying the bills today. And of course one business going under has a massive effect on the industry – our suppliers as well as our clients could suffer if we didn’t survive this cashflow crisis.”

Fortunately a contact mentioned Fredericks as an alternative source of business funding, and while Sky Gardens didn’t seem to match their usual lending criteria, they decided to contact them for advice. Mike Lewis worked with his team to create a new type of short-term emergency lending, and the loan was agreed at £20,000 over four months just to cover the shortfall, with the rest eating into the bank’s agreed overdraft.Sky Gardens - Home Extension - Roof - Fredericks Foundation - Case Study

“The pre-application process was extremely thorough, which impressed us,” says Steve. “Probably more in-depth than any bank we had approached, we were encouraged to consider from every angle our need for the money and the robustness of our whole business. It was a strangely satisfying process as we are usually too busy meeting orders to sit back and look at a wider picture, and it was useful to our future planning to take stock.

“We were more than fortunate to find a lender like Fredericks, prepared to believe in us and to give us the breathing space we needed. This situation is happening to healthy businesses like ours all over the country right now, and I am prepared to say outright that without Fredericks’s support, it is questionable whether Sky Gardens would be here today.

“Then fourteen people would be out of a job, our suppliers would be facing similar crises and our outstanding orders would be left un-met.

“Instead we are facing an even better year than expected and currently dealing with around £3m-worth of quotations every month, confident that those we secure we can meet; and while we don’t necessarily intend to employ any more office-based staff, our network of sub-contracted and freelance staff will grow with us.”