Short-term cash flow review and stakeholder management for a well established, highly profitable family owned business.
Summary
- Well established highly profitable family owned business, engaged in the manufacture of refrigeration equipment for the retail sector; turnover c£10m.
Challenges
- Unexpected request made to Bank for substantial temporary increase in facilities
- A large and unforeseen loss had occurred, principally caused by the last minute deferral of a significant customer contract
- Bank concerned to establish whether the requirement for an increase was temporary
- Also wanted to ensure the Company was supported through the unfamiliar territory of managing cash constraints
- The customer / lender relationship was extremely strained and required sensitive management and facilitation through the review period
How we helped
- Supported the customer in a better understanding of the Bank’s concerns
- Worked with FD and provided constructive challenge to financial information
- Aided and facilitated communications about quantum and nature of support needed
Results
- The required increase was granted
- Agreed a number of specific financial and operational changes would be implemented to secure long term sustainability
- Stakeholder and management expectations addressed
Benefits at a Glance
- Short term cash issue resolved
- Outlook is much more promising
- Stronger business has emerged as result of changes agreed
- Strained relationship remedied; important as re-bank would have been very challenging