Wise Business Finance is delighted to have successfully completed a £600,000 Invoice Finance facility for a newly introduced client operating within the Civils sector.
The client was introduced to us by their accountant, who was proactive in working with the client and helping them explore their options.
The Challenge
The client believed they had a strong working relationship with their existing finance broker, a large, well-known firm. However, despite repeated requests for working capital support, the only solution ever presented was high-cost, short-term lending in the form of business loans.
The reasons given were:
- The relatively short trading history of the business
- The fact that the sole shareholder was a non-homeowner
As funding needs increased, the same solution was offered time and again.
Following an initial conversation with the client, it quickly became apparent that over £300,000 of short-term loans had recently been arranged at interest rates ranging from 22% to 60% per annum, with repayment terms of just 12–15 months.
The resulting monthly repayments were placing severe pressure on cash flow and threatening the stability of the business.
Our Approach
A simple review of the management accounts ,which the previous broker had never requested, showed that the business had a strong and entirely unencumbered debtor book. The solution to the client’s ongoing cashflow issues appeared to be a an obvious one.
The Solution
We structured a Confidential Invoice Finance (CHOCS) facility, allowing the client to:
- Retain control of their own credit control and collections
- Access working capital aligned directly to trading activity
- Replace expensive debt with a sustainable, long-term funding solution
The facility was completed in just under four weeks, on attractive terms:
- 2.25% over base rate
- 0.35% service fee
- Bad debt protection was also included
The Outcome
On day one, the funds drawn under the facility enabled the client to:
- Repay all existing high-cost short-term loans
- Immediately relieve cash-flow pressure
- Reduce the director’s personal guarantee exposure by a substantial six-figure sum
The business is now properly funded for growth, with a facility that flexes in line with turnover rather than restricting it.
At Wise Business Finance we are committed to working with clients and looking to deliver best advice and solutions.
While there are occasions, particularly with start-ups or businesses with impaired credit where short-term lending may be the only option, this case clearly demonstrated that Invoice Finance was both available and appropriate, once the full picture was properly understood.
If your business is seeking working capital, or you would simply like an independent review of your existing finance facilities Wise Business Finance would be delighted to help.
📞 Get in touch today to explore your funding options.
