Invoice Discounting UK - Case Studies

Invoice Discounting UK has sourced Invoice Discounting solutions for a wide range of UK businesses and we have briefly highlighted below some recent cases that we believe will be of interest.

Northern based Recruitment Company - £10m T/O - MBO

The managers of this business initially approached us to source alternative quotations when the incumbent invoice discountin providers were unwilling to raise either their current 70% prepayment or overall funding level of £600k to assist with the funding of the intended MBO.

An increased funding limit was of vital importance to the deal as the managers had the option to secure a large new contract that would be key to the success of the MBO.

Ultimately the solution provided by one of the 2 discounters we introduced facilitated the completion of the MBO. They provided an initial 90% prepayment against outstanding book debts at the time of completion and will continue to fund at 90% for the first 12mths, dropping to 80% prepayment afterwards. Most importantly of all they recognised the growth potential of the business by agreeing a funding limit of £2m.

Southern based Printing Company - £700k T/O - Funding Growth

This well established, profitable, business approached us whilst they were considering an offer of a business development loan from their Bank. The loan would certainly have satisfied their immediate requirements but they were unsure about future needs and unhappy with some of the terms imposed by the Bank.

The directors were already well aware of the benefits of sales linked finance having factored their business for 8 years wit a Bank owned factor. In fact this arrangement had only been terminated 12 mths previously as the business no longer needed the funding at that time and the directors felt that the sales ledger management service provided by the factors had deteriorated in the latter years of the arrangement.

It's fair to say that the directors were surprised to learn that a business of their size could be eligible for Confidential Invoice Discounting, given that it had never once been offered as an option by their previous factor. One of the independent discounters we introduced had a deal not only approved, but also actually paid out within 10 working days.

Northern based Manufacturing Company - £8m T/O - Restructuring

In this case, the Company's Bankers were looking to reduce their overdraft facility following an MBO, which had not achieved its forecasted profit targets. Although the business had been loss making for 2 years, it still had a strong balance sheet and recent management figures were demonstrating a return to profitable trading.

The Bank's own Discounters spent a short time assessing the deal and rejected it. The Company then contacted an Independent Discounter on the recommendation of their Bank and after 12 weeks negotiation and amazingly documentation having been raised, this Discounter pulled the plug on the deal at the 11th hour.

It must be said at this stage that the deal was far from an easy one as although the Company was involved in manufacture, it was also involved in installation of the product and a large section of the ledger was governed by stringent contracts. Given the experiences they had encountered to this stage, the Directors were somewhat sceptical that an Invoice Discounting solution could be found.

At the end of the day, the Directors were pleasantly surprised to find that the Independent Discounting Company that we introduced was able to tie up a deal within 7 weeks at a competitive rate and with a funding line of £950k.

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Invoice Discounting UK
The Cashflow Resource Ltd. 3 Ridley Close, Hexham, Northumberland, NE46 2YL.

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