Client is an established local SME in the food services industry. They needed additional liquidity to grow their business.
Although the client’s current operation is profitable with positive cash flow; the company has significant amount of debt maturing within a year. At the same time, the client needs significant amount of liquidity to sustain and expand operations.
Actions & Solutions
We reviewed their financial statements, available assets and existing banking facilities. As a result of our analysis, we uncovered that the client (i) is not able to fully leverage the property’s new valuation to extract liquidity; (ii) face challenges in optimally using their banking and financing facilities (e.g. their supplier needed SGD 1.0m Bank Guarantee but its current bankers only offer a ~ SGD 200-300k facility per bank and (iii) unable to find suitable receivables financing (e.g. : Insurers and existing financing service providers only offer solutions for select buyer groups)
Client engaged CCRFinance as an advisor and in-house CFO / Treasurer to rationalise balance sheet, develop and execute financing solutions. We provided a comprehensive financial plan that would support the business sustainably covering the following:
Renegotiate with existing banker and engage new financiers for the property
Develop a portfolio solution using insurance (and whole turnover receivables financing) to finance the growing pool of receivables
Structure for a fronting bank on the bank Guarantee, with risk participation from the other BG bank providers