Strategic refinancing for sustained business continuity

26 March, 2024

When refinancing your business now, will secure a profitable tomorrow 

From internal issues such as poor bookkeeping or overtrading, to external factors such as changes to regulations or a financial crisis – there are many reasons that a company may find themselves facing financial difficulties.  

Refinancing can put a business in a stronger financial position, simplifying debts, reducing the costs associated with borrowing and freeing up capital. But is it the right option for your business?  

When a civil engineering company found itself at risk of insolvency, they turned to our team of refinancing experts in Germany for help.  

Having undergone a generational change in management, our client’s new leadership team uncovered inaccuracies in the previous year’s financial statements. Instead of moderate profits as reported, the reality was significant losses and large liabilities to social security, the tax office, and major suppliers. Financed mainly by advanced payments received, and without significant credit lines with any bank, the threat of insolvency was real.  

Look at what you owe, and on what terms

The first step for our team was to clean up the previous years’ financial statements to get an accurate overview of the company's financial obligations.

In total, our team uncovered that financing of around €3 million had to be secured to ensure the company's continued existence.

Helping drive long-term success

Unable to secure bank loans due to their trading figures, we recommended the client sell their extensive, and fully depreciated, fleet of machinery on a sale and lease-back term, and supported the company finding a financier. This process uncovered large hidden reserves which remained tax-neutral due to the client’s loss carry-forwards and led to a recapitalisation of around €4 million.  

Using these funds, our client not only reduced their overdue liabilities and fully refinanced itself, but they also went on to generate an annual surplus the following year. 

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