Multi-million pound Lombard funding supports ‘world first’ in recycling technology
- Customer rapidly starts up lucrative new operation, with the potential to generate circa £500k per annum
- New company creates employment opportunities for the local area
- Asset funding frees up capital for operational costs and onsite facilities
MBA Polymers UK Ltd was established in 2008 as a joint venture between global recycling specialists European Metal Recycling Ltd and MBA Polymers Inc. The brand new company was formed to support the construction and operation of a state-of-the-art plastics recycling plant in Worksop, Nottinghamshire. The plant is designed to recycle 80,000 tonnes of material per year which would otherwise end up in landfill.
As a new business with no operational facilities currently generating revenue, MBA Polymers UK needed to secure funding in order to build the recycling plant which would form the basis of the company. This would also help its parent companies reserve their own operating capital to support the growth of their existing businesses. Following consultation with its corporate banking provider RBS, MBA Polymers UK was introduced to Lombard to discuss the possibilities of securing asset financing.
Piers Grumett, MBA Polymers UK Managing Director, explains the implications, “The Worksop plant is essentially a ‘world first’ in the scale and innovation of the project, so it was very difficult to anticipate the costs accurately as the technology was constantly developing, even during the construction phase. However, the professional service of the Lombard and RBS Corporate team ensured the funding was delivered swiftly and allowed us to maintain our aggressive construction schedule, opening the plant on time and on budget.”
Justine Harding, Relationship Director at Lombard Corporate Finance, comments, “There are challenges involved in lending to an unproven business that is not yet operational, but working closely with RBS helped us to structure a lease purchase deal which provided the necessary security against the individual components of the facility. It was also important for us to find a flexible solution as the deal not only supports Lombard’s commitment to the environment but also in making more lending available to new UK businesses over the next 12 months.”
Lombard Corporate Finance provided £3m funding over a five year term, with a special structure that delayed capital repayments by two years, ensuring that the plant became operational before payments were due on the loan itself. As a result of the timely delivery of the funding, the plant will open one month earlier than originally scheduled, creating 25 jobs in the initial phase, with up to 100 employees required when the plant is operating at full capacity.
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