With the New Year now upon us, it is a great opportunity to look back on the variety of businesses that have benefited from a Cashsolv business loan in 2014.
Throughout the last year we have been fortunate to assist a number of companies in a variety of industries with each scenario requiring a bespoke solution.
A summary of the some of the business loans that we have completed are detailed below.
Boat Building Company - £20k
This company required our assistance when it had part completed a build for a customer and had insufficient funds, or credit with its suppliers, to purchase the engine required to complete the contract.
The contract with the customer had been drawn up to include stage payments, but unfortunately the final payment, which included the cost of the engine, was not due until after a successful sea trial with the customer on-board. This was impossible without an engine.
With our extensive experience of the marine industry, we were able to review the status of the build and the terms of the customer contract. Satisfied that the loan was feasible, within 24 hours of being contacted by the director, we provided the company with the funding required for the engine.
A successful sea trail enabled the loan to be repaid within a month, resulting in only the minimum fee being payable. The company has another satisfied customer with no knowledge of the potential delay the project faced.
Wholesale Food Company - £25k
One of this company’s largest customers had previously been placed into liquidation. The company was able to continue trading, but due to the bad debt it had suffered, it took a while for the cash flow to recover. They were advised by the liquidators that a distribution from the liquidation was likely to be paid within 3 months, however, the company found itself needing funds immediately to fulfil a large order.
The dividend expected from the liquidation was the only significant asset within the company and traditional lenders were hesitant to lend on the basis of the forthcoming payment.
Working with the director, we were able to identify that the business was still viable and that the claim in the liquidation had been correctly submitted and agreed.
A three month loan was provided to the company and has since been successfully repaid.
Theatre Production Company - £30k
A theatre production company that had recently embarked on a tour of their new production, unexpectedly suffered the loss of investors' support and found itself struggling to pay its cast members. Multiple shows had already been successfully performed and the reviews, together with ticket sales, had been exceeding the directors’ expectations.
The terms agreed with theatres were that the company would not usually receive the revenue from ticket sales until two months from the date of a performance and so the investor’s funds were imperative for the success of the production.
The company’s assets consisted of the usual theatrical scenery and equipment, but it was also due a substantial tax refund under the new Theatre Tax Relief scheme. The company was unable to provide traditional lenders/investors with the security required for a loan facility and subsequently sought advice from Cashsolv.
We reviewed the documentation in regard to the tax refund and also undertook a review of the company’s cash flow forecast. We subsequently concluded that a short term Emergency Loan was the answer to the company’s problems and we agreed with the directors that the business finance could be repaid either from the tax refund or the payment of the first ticket sales, whichever came first.
Firm of Independent Financial Advisors - £58k
Cash flow difficulties can affect all types of companies in every sector. This IFA practice had been going through a difficult year due to its franchise network being placed into administration which effectively immobilised the business for 8 months.
HM Revenue & Customs had presented a winding up petition against the company, which resulted in the bank account being frozen with substantial funds sat in the account.
With the directors assistance we reviewed the cash flow and pipeline for the business and subsequently lent the company £58k. This lending was used to settle the debt due to HMRC and have the winding up petition against the company withdrawn.
The bank account was subsequently released and the majority of the loan provided was repaid. The remaining funds were repaid from the ongoing business in the company.
Transport company - £50k
This chauffeur/transport company had secured a lucrative contract but it required the company to purchase 3 new coaches. This unexpected large purchase had a dramatic impact on the short term cash flow for the company.
The company did not have sufficient funds in hand to meet the first finance payments on the three coaches as the large contract had not yet begun. Working with the directors we agreed an emergency loan to be repaid once the VAT reclaim for the purchase of the coaches had been received.
Since providing this loan the company has received significant positive media coverage and has gone from strength to strength.
When you are running a business, it isn’t unusual for things not to go to plan. In scenarios such as these the directors feared that their reputation would be damaged and that creditors would be left unpaid. With Cashsolv’s advice and subsequent loans, the directors are now able to continue to trade the businesses that they worked so hard to build.
For further information on short term business loans Download our Guidance Paper on 'How short term business loans can help your business finance problems', or view the following relevant pages:
- Business loans
- A guide to Short term business loans
- Emergency business loans
- Emergency business loan - why not use a bank
- A guide to Small Business Loans
- How quick business loans can encourage business turnaround
- How to get a quick business loan
- The pros and cons of secured business loans
- How to make business finance work for you
- A case study: How we helped a recruitment firm invest for growth
- A case study: Quick business loans could be the answer
- Business loan calculator