Knitwear Manufacturer
This company is about 120 years old and had been in SLS with RBS twice before. Both times they had successfully traded out of this situation. At the beginning of the year they had just returned a significant 6 figure loss and were threatened with SLS again unless they took Invoice Discounting through RBS. They signed up to this and immediately had all other facilities removed which led to them being put into SLS again with serious cash flow issues. As this is a seasonal business CID only works when they are making sales but fixed costs for running a factory of 170 people are quite significant.
We arranged a £300k short term loan with Peninsula. At the same time we sorted a new CID facility with 5 Arrows that is linked to a stock facility which will kick in during periods of no sales. The stock held is a maximum of £1.4m which RBS were writing down to 10%, Five Arrows consider up to 70% of this. Five Arrows were also happy to provide a property loan of £450k against the same security and this will kick in after 3 months to repay Peninsula.
The company now have sufficient cash to run the business and a better facility for CID. All borrowing has been removed from RBS and the account has now been returned to branch control.
“Lochroe’s service was excellent they understood our business needs and provided solutions in a professional and friendly manner. We would use them again without hesitation.” Nick Bannerman MD