Our clients who specialise in Health and Safety Audits and projects for public entertainment spaces were referred to us by their Accountant. The Company’s annual turnover was £475,000 with a bank overdraft of £65,000.
The Company had traded for four years and they had six employees. A recent project where they had diversified into Europe had incurred a loss of £75,000.
Problem
Arrears had accrued with HMRC and the bank was demanding a reduction in the overdraft facility. Without further funding the business could not survive.
Solution
The Company had sufficient cashflow to continue trading for a short-term period whilst external funding was sought. We requested their accountant to provide forecasts showing that with additional funding, the company could grow to make profits of £120,000 per annum.
The Directors obtained a shortlist of potential investors from their networking contacts and an investment of £100,000 was granted. The investor who was a highly experienced business individual focused on an exit within five years.
The Directors had made the assumptions that their only solution was to place the company into Liquidation. With a little outside the box advice, we were able to change their mindsets.
Most of the Company’s clients were national organisations and so a new Company would not have been able to obtain the necessary accreditation to do the work. As Navigate Business Recovery was appointed, we avoided a cashflow problem becoming the cause of the closure of the company which gave the Directors a second chance without the Creditors losing out.
Next Step
If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email me vee@navigatebr.com
This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.
Leave a Reply