Background & Problem
Turnover: £600K – 800K
The company is a quality provider of kitchen equipment maintenance and repair services. It had been in CVA (creditors’ voluntary arrangement) for 18 months, but was stuck in the mire of what was a very onerous CVA, never really getting its head above water and struggling to maintain the CVA payments.
Action Taken
By using recent government legislation put in place to assist the restructuring of businesses with debt, FSBA were able to eliminate the debt to the business and free up the management team to focus on developing the business forward.
FSBA further assisted the company in putting greater focus on the debt collection side of the business. They were feeling the squeeze from their invoice finance provider and on reviewing the situation FSBA were able to establish that it was the company’s debt collection process which was creating the squeeze, rather than the invoice finance provider themselves. Within three weeks, the cash flow issue was resolved.
Finally, they were levied a security deposit by HMRC in relation to their VAT payments, of some £25k. By using one of the FSBA pecialists, we were able to successfully appeal the levy so that the company was not required to pay any levy.
The Result
Six months after the restructuring, the business is growing from strength to strength, with turnover increasing by 33% and the business breaking even in the first three months and moving into significant profits in the second quarter.
