Case Study Three
The client had a normal turnover of £4 Million but had suffered from declining sales and needed to take corrective action to keep the bank from recalling the existing borrowings. The business had not only seen a decline in sales in the previous trading period but had also written off two substantial bad debts. This had resulted in a financial loss for the company for the first time in its history.
ECS appraised the existing asset of the business and provided a substantial uplift in the company’s cash availability. By introducing a confidential invoice discounting package the bank overdraft of £150,000 and a term loan of £125,000 (secured against the business premises) were fully repaid. The client also had a further £250,000 of available funds created which was used to upgrade existing manufacturing equipment and invest in a sales and marketing programme to capture new clients. By using this financial product the company not only had a facility that would expand with their future growth and was not “repayable on demand” as with their previous overdraft.
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