Factoring Case Study - Printing - Rescue Funding

Deal type: Rescue Funding Industry Sector: Printing Turnover: £2.5m

A previously successful general printer encountered difficulties when it became involved in a publishing venture resulting in losses. These increased further following the mismanagement of a large fixed price contract.

By the time we were introduced there were arrears of over £350k to the Inland Revenue, pressure from its paper suppliers and a refusal by the bank to increase the overdraft. Four factors had already declined to help.

It was clear that a factoring facility on its own would not provide the answer. We therefore arranged an Asset Based Finance solution incorporating factoring, asset finance secured against unencumbered printing machinery and a freehold property. This generated £900k on a 75% prepayment basis which provided enough to clear the overdraft and mortgage and gave sufficient comfort to the Revenue to accept repayment of the arrears over twelve months.

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