The sharp increase in volume represented an inflection point for the business. With the right financial structure in place, our client had the opportunity to cement its position as a key logistics partner to a major supermarket group and build on a significantly larger revenue base. The goal was twofold: refinance the existing expensive debt to bring down monthly debt service costs and free up cash, while also injecting new capital to provide relief as the business stabilised after such a rapid period of growth. Achieving this would transform what was a period of financial strain into a platform for long-term, sustainable expansion.
An early priority was the placement of a fractional CFO through one of our trusted partners. This was essential both for producing the quality of financial information required during the process and for providing the business with sound financial leadership on an ongoing basis.
We then conducted a thorough assessment of the company's existing debt position, demonstrating clearly that the current cost of borrowing was unsustainable. We mapped out what the business could realistically afford and showed that a debt consolidation would bring monthly outgoings to a manageable level.
From there, we built an integrated financial forecast that illustrated where the business would be if revenue continued at its new level and the proposed refinancing was put in place. This forecast needed to tell a credible story; one that backed up the commercial strength of the business with a positive forward outlook grounded in reality. Critically, it also demonstrated that an uplift in the invoice finance facility was necessary not only to inject cash upon completion of the deal, but to support the business as it continued to grow over the following two to three years, preventing a repeat of the overtrading pressures it had experienced.
The solution comprised a £2 million Confidential Invoice Discounting facility, which replaced the existing provider and delivered an £800,000 uplift in the facility limit. This was paired with a £120,000 unsecured cash flow loan. Together, the combined £2.12 million facility enabled the settlement of outstanding high-cost debt, significantly reducing the monthly debt service burden and freeing up cash within the business.
The impact was immediate and far-reaching. By replacing the existing invoice finance provider with a facility that offered both a higher funding limit and more favourable terms, the business was able to unlock the working capital trapped in its growing debtor book. The unsecured term loan provided an additional cash buffer, giving the company breathing room as it continued to stabilise following the sharp increase in volume.
The reduction in monthly debt service costs had a direct positive impact on cash flow, while the increased facility headroom positioned the business to grow into its new revenue base over the coming years without the risk of further overtrading. Combined with the ongoing support of a fractional CFO, the company moved from a position of acute financial pressure to one of stability and confidence, with the financial infrastructure in place to support its continued success in the competitive refrigerated logistics sector.