Quickly engineering a funding package
An engineering firm, which prefers to remain anonymous, had built an excellent reputation as specialists in the design, manufacture and installation of steel chimneys, as well as structural and architectural steelwork.
Sadly, the uncertainty surrounding Brexit led to a fall in orders, added to which, contractual problems with a particularly large project caused cash flow issues. The subsequent pressure from creditors, resulted in the company going into administration.
An insolvency and recovery practice was appointed as administrators and quickly identified that, with a certain amount of restructuring, the underlying business was sound. It had a good management team and an impressive client list, including major building and civil engineering contractors, local authorities, motor manufacturers, major retailers and shopfitters.
It was agreed to sell the company for £1.2m in a pre-pack deal with the new company returning to the way it had successfully operated over seven decades. Instead of lengthy ongoing projects, it will concentrate on one off jobs against a purchase order, rather than an application for payment.
However, funding was needed quickly to save jobs and to honour its customers contracts. The administrators immediately turned to Reward Finance Group and, having met with the management team and studied the new business plan, the secured business finance funding was agreed within a short timescale.
The managing director of the engineering firm said,
“It was great to deal with two companies that recognised the underlying business was sound. Several things had conspired against us, so it made sense to return to our core business, which had been a proven success.
“We are all extremely grateful to the administrators for recognising the future potential of the company and for introducing us to Reward Finance Group. The latter understood our business model and the strength of our team, and quickly provided the necessary funds enabling us to buy the company.”
A spokesperson for the administrators, continued,
“We needed to move fast in order to rescue the business, secure the jobs and ensure the continuity of contracts. We therefore immediately contacted Reward Finance Group, as we know it is a company that really understands how businesses operate and can make fast lending decisions, rather than going through a box ticking exercise. Within a few days the funds were in place and the transaction went ahead.”
Chris Ibbetson of Reward Finance Group concluded,
“We worked well as a team and I am delighted that we have helped to rescue such a long-established and reputable company and safeguarded jobs.
“With other lenders paid back and the potential of a return to creditors, it has been another very satisfying outcome.”