New facility found for evolving business

Hilton-Baird Financial Solutions has helped a funding partner to manage away a client, which had evolved and moved outside of the lender’s appetite.

The factoring facility initially worked well for both parties for quite some time. However, a shift in the nature of the client’s customer profile and processes began to cause concerns for the funder.

For example, the volume of work carried out by the client for their top debtor rose unexpectedly and significantly, increasing the ledger concentration.

Further, jobs involving the delivery of equipment to remote sites outside of business hours meant that PODs were rarely obtained and, as communication between the sites and their head office was quite slow, this made debt verification very challenging.

Additionally, the nature of the debt became increasingly contractual as, though there were no formal contracts in place, the client was invoicing for multiple jobs covered by a single purchase order.

The client and funder relationship had become strained following an audit, which raised concerns about the quality of the client’s admin. This prompted the funder to contact us as the original introducer to ask for our support in sourcing a new facility for our mutual client.

Working in collaboration with all parties

Our dedicated team worked closely with both the client and the outgoing funder to source viable new options, which would facilitate the right funding given the client’s sector and nuances.

We worked with potential incoming funders who were fully appraised of the history and able to take our client’s strengths, such as their payment history and the quality of their debtors, into account in order to generate the required amount of availability through a new facility.

The outgoing funder was very supportive throughout the process as we obtained the client’s consent to keep everybody in the loop at every stage of progress, providing the outgoing funder with insight and transparency and the ability to make decisions regarding pre-payments in the interim stage.

Additionally, we were able to provide insight into systems and processes that needed improvement, to help the client move forward in a positive way and to work closely with the incoming funder so they would be confident in the new relationship, gaining access to the right level of support for their ongoing needs and growth.

From our shortlist of options, our client made their choice and seamlessly transferred to a new funder and facility within a matter of a few weeks.

We’re thrilled that we were able to support our client, who is now poised to confidently continue their growth strategy, and that we were able to make the process as smooth as possible, ensuring cash kept flowing throughout the process.

We are equally thrilled that our funding partner was able to confidently support the process and reduce their risk in line with their appetite, whilst parting company amicably and positively. Our client left with a good perception of their outgoing funder and things could have been very different if the funder had lacked either the insight into the likely transfer, or the confidence to carry on making the necessary advances to keep the business in order whilst the transfer was taking shape.

To explore how we can support and facilitate any manage aways, whether you have outgrown your client or, as was the case in this instance, they have outgrown you, please contact us on 023 8070 7390 or We would also love to work in collaboration with you to arrange any complementary funding or even credit insurance needs your clients may have.