Client Challenge
We were approached by a Scottish Accountant who had a client who had suffered a downturn in business from November 2014 to February 2015 as well as a major client delaying a multi-million pound project. This had resulted in their overdraft being at the limit and the bank was reluctant to help them. Redundancies had been made and pay cuts implemented. The company needed an urgent additional £50,000 to bridge the funding gap until the forecasted upturn in cash flow expected in July 2015.
Approach
A full study of their existing borrowings was undertaken as well as a review of past performance, existing client base and future potential. As they were already highly geared it was decided that traditional bank lenders would not be willing to help and that debt Crowdfunding offered the best solution. We work with a panel of 10 different Crowdfunders all of whom have different lending criteria and indicative rates. To get the best terms in the shortest time for our client we always approach multiple providers in parallel.
The first two debt Crowdfunders turned them down, but the third accepted their application.
Outcome
The 14 day funding auction went live on 20th May and the client became fully funded on 3rd June. The loan was paid out a few days later. The cash flow gap was bridged and the client did not have to make any more redundancies in the skilled workforce who would then be difficult to replace in the future.
