Case Studies - Large Business

Printers

This general printer ran into problems when it diversified into publishing. Losses were exacerbated by poor management of a large fixed-price printing contract. By the time the directors had contacted our offices, arrears had reached nearly £400k. Paper suppliers and the Inland Revenue were pressuring the company for payment, and their bankers would not increase the overdraft facility.

This was a challenging assignment made even harder by the knowledge that four factors had already considered and refused facilities.

Undaunted, we presented all the facts in the case to a factor that we knew would take a wider approach towards security. As well as looking at equity in freehold property owned by the firm, they also viewed as suitable equity in the printing machinery.

Before a week had passed, this factor had offered the printing firm a factoring contract. The factor was able to provide £900,000 against 75 percent pre-payment. This was subject to the clearance of the mortgage and overdraft and also approval by the company's preferential creditors.

Directors were not required to provide personal guarantees. The factor registered a debenture to cover the security and two and a half weeks after the intitial introduction the cash was passed over to the printer.

Software Company

A software developer that had developed a ground-breaking email archiving system had secured substantial orders from large organisations across several industry sectors. Forward orders had been received from shipping brokers, law firms and pharmaceutical companies, among others.

Although the company was in its infancy, the directors forecast revenues in excess of £6m for the first year of operations. We quickly secured for the client a confidential invoice discounting facility.