With restrictive contractual clauses with key customers
- Traditionally one of the most difficult sectors to fund
- Due to difficult contractural clauses, long lead times and usually fraught with cashflow difficulties
- This newly established business was experiencing a period of high growth and was in dire need of more working capital
- The directors were experiencing personal cashflow crises themselves and were not able to secure additional finance from their own resources or assets
- Timescale before the business became insolvent was estimated at 6 weeks
- The business, major cashflows and management systems were reviewed and understood quickly
- Suggestions were made to implement some new systems which would be required by any lender to this sector
- Funders were identified who specialised in financing this type of business
- A confidential factoring facility was provided, secured on the trade debtors and the director's personal assets
- In addition, further finance was provided by the same lender who took some totally unsecured risk for a short period
Ensure your advisor can source the most appropriate form of funding for your sector, and personally knows the contacts at these financial institutions.
The high street banks aren't necessarily the right route to take.
The member firms of The Corporate Finance Network can provide you with this advice. They specialise in advising SMEs about raising finance - please be aware that this is a very specialist area and not all accountants have this knowledge.