The client, an established global specialist R&D company. Following a period of rapid expansion, they experienced typical cashflow shortages associated with quick growth, the contractual nature of income, investment in their own trading premises, plus plant and equipment.
The Problem
The in-house commercial broker recommended by their accountant arranged several short-term (5 years or less) and expensive cashflow funding products that were ‘quick’, non-labour intensive and paid strong commissions.
The short term cashflow funding products exacerbated the problem, and the company required further urgent assistance. They were literally days away from having to appoint an insolvency practitioner when referred to Cornerstone Commercial Finance.
How We Helped
Upon assessing the case, our Commercial Manager quickly realised that the clients had been poorly advised and overloaded with multiple short-term funding products and the combined effect of very high interest rates and short repayment schedules had taken the company to the verge of liquidation.
A two-stage recovery process was quickly arranged with a temporary 5yr loan (lower cost and with a capital repayment holiday), injecting sufficient funds into the company to stabilise the position and initially reduce / repay an element of the short-term borrowing.
Alongside this, a traditional term commercial loan was arranged via a High Street bank, secured against the trading premises. The traditional loan repaid all the short-term cashflow borrowing (including the temporary loan arranged in step one).
What This Shows
This case highlights both, the lack of quality, appropriate advice in the “Commercial Broker” market, where the original “broker” simply took the easy route of repeat short-term, expensive lending, generating quick commissions, against the fully experienced, relationship-based ethical broking we promote within the Cornerstone Group.
Just because we can arrange a deal, doesn’t mean we should.
Providing professional, measured guidance to clients on product selection allows them to run their businesses successfully and avoid losing them to unnecessary costs. Successful business clients will naturally generate enquiries for personal finance products, and have the means to retain them – whether that’s mortgages, insurance, private medical insurance (PMI), or pensions.
Need Smarter Finance, Not Just Faster Deals?
Don’t let short-term fixes put your business at long-term risk. If you’re facing financial pressure or just want to ensure your funding supports real growth, we’re here to help.
