The Challenge

A family-owned business operating in the private hire coach/transport sector had come under severe pressure from several creditors, in particular HM Revenue & Customs, who had run out of patience and excuses and had already presented a winding-up petition which was due to be heard within 10 days. On becoming aware of this, the company’s accountants refused to act and formally terminated their ties with the company.

When the 17-year-old son of the founding Director of the business called us, we had a simple decision to make. As the winding-up petition was only 6 days away, we either walked away or tried to help. Having listened to what the family had been through over the months and what they had dealt with on their own with little help from their accountants and the bank, we made a decision to step in and help.

Eight months before this, the founding director of the business had unexpectedly suffered a heart attack and died, leaving his wife and two teenage sons, 17 and 21, to run the business. Although the encumbered accountants had prepared a ‘business plan’ together with financial forecasts, unfortunately, all this did was borrow money against assets to pay off HMRC and place the company into a corporate Voluntary arrangement to attempt to make a deal with trade creditors.

The business, whilst small, had some good and loyal staff who had been there for over 14 years and were committed to the family and the business.

Our Approach

Step 1: Business Review and Understanding

We went to the business the next day and sat with the family and staff and conducted a detailed review of the company’s financial position, asset base, customers, and operational requirements. We worked closely with management to understand the immediate and long-term commercial objectives.

Step 2: Credit & Risk Review

We assessed risk, security and repayment structures, focusing on sustainability rather than short-term solutions.

Step 3: Solution

• We used our network of contacts and were able to identify a competitive business in the locality, which was a perfect fit to allow the business to consolidate its operating costs and simultaneously increase its customer  base and revenue with an additional £350,000 of sales.

• We contacted the competitive business and, within a very short period of time, we were able to negotiate a purchase of that business, which we provided the capital to complete.

• Consolidating some of the management from the acquired business into the company, we were able to not only bring sales and management but also plant, equipment and vehicles to provide the company with a better and more profitable platform to move forward.

• We contacted HMRC and again, through our network, were able to negotiate an adjournment of the winding-up petition together with a repayment plan, which again we stepped in to provide capital for.

Our approach was based on a long-term solution designed to refinance existing liabilities and inject immediate liquidity to stabilise the company.

Step 4: Execution & Funding

Despite the timeline of the transaction, we were able to complete our funding within 12 days, ensuring the survival and expansion of the company.

Step 5: Ongoing Support

Post-completion, we continued to support the business with strategic oversight and management support. Our ongoing advisory team’s role helped management to integrate the two businesses and provide a smooth and clear transition.

The Outcome

• £1.4m structured funding facility completed

• Immediate help and support

• Refinancing of legacy banking debt

• Business positioned for sustainable growth and future strategic opportunities