Asset Finance: Scaling Production Without Sacrificing Ownership
Scaling a business is exhilarating, but it’s also expensive. For growth-stage SMEs, the leap from manual operations to full-scale production often requires serious investment in equipment and infrastructure. The challenge? Doing it without draining cash or giving away equity. That’s where asset finance comes in.
In this post, we explore how Paul Sherratt, founder of Gloveglu, used asset finance to scale his business from a kitchen-table side hustle to a global brand while retaining 100% ownership.
From Kitchen Table to Global Brand
Gloveglu began with Paul and his wife manually bottling product at home. Today, the company sells in 55 countries, with one product sold every 150 seconds.
- Personal risk: Paul went “all in” at age 50, remortgaging his home to fund the business.
- Organic growth: gloveglu grew 40% year-on-year for three consecutive years.
- Global ambition: Secured listings with major retailers like Dick’s Sporting Goods in the US.
Why Asset Finance?
As demand surged, Gloveglu’s manual production couldn’t keep up. Paul needed around £100,000 worth of bottling and labelling equipment but didn’t want to sacrifice equity or cash reserves.
- Challenge: Fund equipment without compromising ownership.
- Solution: Asset finance through Metro Bank.
- Outcome: Production capacity jumped from 400 to 4,500 bottles per day.
Asset finance turned a labour-intensive process into a streamlined operation, enabling Gloveglu to scale efficiently.
The Cost of Growth
Growth is exciting … but it comes with a price.
- Long payment terms: Retailers demanded up to 90 days.
- Marketing contributions: Required to support retail listings.
- Inventory pressure: More stock, longer cycles, and upfront costs.
Even with strong sales, cash was tied up in the supply chain. Paul used a mix of asset finance, bank loans, overdrafts, and stock funding to bridge the gap.
As he puts it, “Nobody wants a warehouse full of size 11 gloves” ….a reminder of the importance of managing inventory and cash flow carefully.
Debt vs Equity
Paul made a deliberate decision to retain 100% equity in gloveglu.
- Pros: Maintained control and ownership.
- Cons: Higher borrowing costs, especially early on.
- Long-term view: As the business scaled, margins improved and reliance on debt decreased.
His approach was shaped by advice from a senior contact at Morgan Stanley: “Hold onto your equity… you may regret giving it away too early”.
Lessons Learned
- Stick to your core: Diversifying into apparel and gloves added complexity and lower margins. Paul later refocused on gloveglu’s core product range.
- Know your numbers: Finance wasn’t Paul’s strength, but he learned fast. “Don’t be under any illusions how critical that is.”
- Plan your funding: Every facility was tied to a specific project—no vague borrowing, just targeted investment.
Final Thoughts
Asset finance can be a powerful tool for SMEs looking to scale without sacrificing ownership. It’s about using debt strategically, understanding your cash flow, and investing in the right assets at the right time.
Listen to our related Finance Focus Podcast: Asset Finance - Scaling Production Without Sacrificing Ownership
