|Requirement:||£250,000 Invoice finance + £15,000 working capital|
This manufacturing business in the North West has solid clients but had a challenging relationship with an existing lender. Whilst a relatively young business their aspirations for growth were being hampered by a poor lending partner. This mismatch led to strained cash-flow and the pressure of a quarterly HMRC bill led to a refinance. .
Despite setting up an asset based lending (ABL) facility that encompassed stock and invoices, the current lender had reduced its criteria for funding the stock as well as not advancing as much on the invoices as had been envisioned. The payment of the HMRC bill meant that paying both the monthly supplier and wage bills had become challenging. The management team managed to scrape through on the first month following the HMRC bill, but were struggling thereafter and had suffered a CCJ.
The challenge was to refinance in time to meet the next month's obligations. This would require not only finding a more appropriate lending partner but ensuring the existing lender would release their contract and debentures in a timely manner.
There was also a need for a short term loan to bridge the gap.
The business sought to refinance their ABL line with a new lender, one who would provide confidence of both the stock financing and the invoice line.
In consultation with a client manager a short term working capital solution was put in place for 3 months to provide for immediate obligations. Secondly the transition to a new ABL lender was achieved. The working capital provided the bridge between the two lenders.
The result was a slightly more expensive facility, but one that would provide the working capital required to drive this business forward.