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Case Studies
| Colour Printer - T/O £850,000 p.a. |
A very profitable, niche printing company which had struggled to finance itself using a £35,000 overdraft.
The bank would not increase the facility but insisted that their own factoring subsidiary be used. FactoringChoice were asked to seek alternatives and were able to secure an offer from an independent Factor.
The Service and Funding charges were £3,000 less and the advance level against invoices 5% more than the offer from the bank's Factor. In addition, the Directors were not required to sign Personal Guarantees.
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| Steel Stockholder - T/O £12,800,000 p.a. |
A profitable business and the subject of an MBO in 2002.
The bank provided an overdraft of £175,000 and their invoice finance subsidiary provided a confidential invoice discounting facility of £2,500,000. The steel stockholder is always looking for other, similar companies to buy and wanted additional working capital.
Their bank responded negatively to the request and this lead to a deterioration in the relationship. FactoringChoice introduced a major Structured Finance company that offered confidential invoice discounting with a 10% higher advance level against debtors, together with a stock finance facility.
The combined effect was to increase the availability of cash by £450,000. Small reductions in annual charge also featured and we have introduced them to an alternative bank.
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| Express Delivery / Storage - T/O £7,400,000 p.a. |
The company was the subject of an MBO in 2001 and had obtained a confidential invoice discounting facility via its Clearing bank.
Upon investigation, it emerged that there had been no revision of the terms of the facility, notwithstanding an increase in sales of some £3,000,000.
FactoringChoice was asked to find an alternative supplier of working capital and another bank, both of which were quickly achieved. The Annual Service Fee charged by the incoming invoice discounter was £6,000 p.a. less and the availability of cash increased by £100,000.
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| Stationery Distributors - T/O £1,200,000 p.a. |
The company took full advantage of the demise of a local competitor and increased sales quickly. This lead to severe cash flow pressure and the bank were asked for help. They introduced their own factoring subsidiary, who, after three weeks deliberation, declined the business because of lower than average sector margins and high exposure to a major customer.
This decision made it impossible for the company to pay the wages and FactoringChoice were asked to find some working capital for this business-quickly.
We had a deal agreed on the day of receiving the introduction and the company were paid money on the fourth day. It is now thriving.
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| Chauffeur business T/O £400,000 p.a. |
This business carries managers to and from airports and hotels for a number of prominent companies and has a long-standing and loyal customer base. The co-owner was declared bankrupt after admitting some naïve personal financial management.
The bank's factor considered continuation of the six-year, amicable relationship to be inappropriate. The co-owner set up a new business with the same customers and wanted a factoring facility set up quickly.
FactoringChoice made the arrangements funds were paid to the business within three working days.
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| Logistics company - T/O £600,000 p.a. |
Well-established and highly profitable, this company supplies worldwide transport with trucks and drivers at weekly rates.
The Managing Director had become frustrated by the rejection of his proposal by a number of invoice finance companies because there was just one customer, albeit, highly credit-rated and underpinned by a solid contract.
FactoringChoice introduced an independent factor who visited the Managing Director on the day of the introduction and agreed the deal on the spot. Funds were paid one week later.
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| Computer Services - T/O £100,000 p.a. |
A small, but growing, computer services business having annual sales of £100,000 experienced problems with its book-keeping. This lead to an increase in amounts owed by its customers and put pressure on the cashflow.
We were able to introduce a factoring facility geared to the needs of a very small company that took over collections and advanced money against the amounts receivable from customers.
The increase of available cash of some £30,000 enabled PAYE and VAT arrears to be paid, in addition to a backlog of wages to a loyal staff. The company has picked up new orders and is going from strength to strength.
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| Industrial Removals - T/O £850,000 p.a. |
A specialist industrial removals business, with an annual turnover of £850,000, that had financed its growth by using a factoring facility.
The customer base had increased during the previous six months to include a number located in Eastern Europe and the invoices being sent to these for completed work could not be factored.
We were introduced by the factoring company, as they realized that the nature of their Client's work had changed fundamentally.
We introduced an export factor that has been able to take on the existing sales ledger and pay an additional £68,000. This has enabled the removals company to tender and win more work and they anticipate turnover in the coming twelve months to exceed £1,500,000.
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| We can go on...... |
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