Midlands based Plastering contractor
This business was involved in the construction sector and had seen some hard times in the past few years. However, due to excellent management and control of the business it had managed to reduce it’s overheads as it’s turnover reduced. It still had a turnover of over £6m per year and a good customer base.
However, one of it’s major customers suddenly changed it’s payment terms from 30 days to 90 days. This meant the business would be without a large amount of cash for 60 days. The business tried to finance this transition itself but it was impossible. They also asked their bank for help but they refused and the business was getting behind with PAYE and VAT liabilities. HMRC (PAYE and VAT) were now threatening legal action and even mentioned possibly winding up of the company. This business employed over 300 people but their bank and HMRC would not help.
After contacting Business Advice Services we looked at a number of different options. Because the business had a lot of assets, liquidation or administration was not really an option and the main issue was the change in payment terms of their biggest customer. We introduced them to an invoice financing company that specialise in the construction industry and after some discussions they very quickly set up a confidential invoice factoring facility so that the business would get paid a percentage of their outstanding invoices immediately and then a percentage of future invoices and applications and valuations as soon as they were done.
Because it was a confidential facility their customers did not know they were using this facility which was very important. By doing this it enabled the business to clear their outstanding HMRC debt and reduce their overdraft. Almost overnight the business was back on an even keel and back to normal.
I was very impressed with the way that Business Advice Services explained the different options that were available to us and the advantages and disadvantages of each one. Once we decided which route to go down the speed with which it was completed was equally as impressive. I am sure Business Advice Services have many clients but their service was such that we always felt that they were only dealing with us and I particularly like the fact that I only dealt with one person from start to finish who knew exactly what stage we were at with everything.” – BS, Managing Director