Sweeep frustrated in efforts to get loans

An award winning recycling company that wants to recover valuable metals from old TV screens by investing in new processing technology has been frustrated by the reluctance of its bank to lend it any more money .

By Richard TylerPublished: 12:01AM GMT 12 Jan 2010
Sweeep, based in Sittingbourne, Kent, has recycled 20,000 tonnes of electronic and electrical waste that can no longer be sent to landfill and had planned to expand to take advantage of the piles of old TV sets piling up across the UK to extract valuable lead, copper, steel, aluminium and precious metals from circuits boards.
But attempts to secure the £1.5m it needs to buy the innovative British-made waste treatment equipment stalled when its bank, Barclays, baulked at extending further credit lines to the profitable company, which made sales of £5m last year and has £2m of outstanding borrowings.

Pam Watts, who founded the business with her husband Patrick, a former professional touring car driver, in 1997, said: “We buy very expensive, innovative and complicated machinery that’s at the forefront of the recycling sector. We employ it to create a profit and as soon as it’s established Patrick is on to the next project that will require more investment. For the recycling sector to move forward it needs support from banks that trust us to get on with the job.”
She added: “We are now relying on a 25 year old partnership with Barclays which has been pretty exemplary and we are hoping that will be taken into account.”
Sweeep have been finalists in Barclays’ own green business awards and have been endorsed by Tory leader David Cameron, who visited their recycling facility in 2008.
Mrs Watts said they began talking to their bank manager early last year but the application was only submitted in November. Barclays said it would be considered by its asset finance arm, but this may now switch to its team that considers Government-backed Enterprise Finance Guarantee loan applications.
Mrs Watts said: “[Lord] Mandelson is telling the public both the government and banks are supporting industry and small businesses financially and Britain is fully behind the green revolution and reducing carbon emission. Sweeep ticks almost every box in all of this.
“We are offering innovation and a new project to reduce landfill and recover lead from hazardous old style TV glass. We have a proven track record, years of experience, no hidden failures in the past, a profitable business, can demonstrate our ability to service debt comfortably, employ over 100 unskilled workers and have the confidence to offer our banks personal guarantees. Yet somehow getting hold of this financial support is like catching mist.”
Barclays said it was “exploring all possible options” to help finance the company. A spokesperson said: “Sweeep is a valued client and quality business, with a strong track record and excellent prospects for growth. However, the business has already borrowed very heavily, and has utilised virtually all of its available security for this borrowing.
“Therefore we need to be innovative in how we approach new lending; with high borrowing comes high risk, for us and for the business. We are currently working through options with Sweeep including asset based lending and an Enterprise Finance Guarantee loan to try and find a way forward.
“In cases such as this, where taking on more debt is becoming increasingly risky for the size of the business, many clients we work with will instead seek out new, long term investment, as it spreads the risk and takes the focus away from servicing loans.”