Multi-million pound ABL facility agreed

Now, more than ever, lending decisions must be based on a detailed analysis of the prospective client, their objectives and their assets.

This task comes under even more scrutiny when the stakes are high, which was certainly the case when Hilton-Baird Audit & Survey was instructed to survey a £70 million turnover business looking for a funding facility to facilitate an acquisition and provide a much-needed working capital solution.

With the management team looking to acquire a majority share in the business, our business analysts were quickly on site to take a detailed look at the company’s accounts receivable, obtain all the relevant information and make informed recommendations as to the facility in question.

This process involved extending the sample on the transaction test to fully understand the paper trail, in addition to looking closely at the credit notes in order to drill down into higher-than-expected dilution numbers. Our analysts also reviewed the company’s key contracts in search of onerous clauses and quantified the rebates, all to give the lender maximum comfort.

Based on all of the information gathered, our recommendations led to an £11.1 million asset based lending deal being agreed. This comprised a £9 million invoice discounting facility that was complemented by a stock finance facility. As a result, the acquisition was safely completed with the business able to reap the benefits of a healthy cash flow.

If you would like to find out more about our surveys, please call 0800 2761310 or email audits@hiltonbaird.co.uk.