£3.5 M Invoice Discount Facility for Maintenance Business in Offshore Energy Industry
26th February 2024
- Client: Approximately £30,000,000 revenue maintenance business
- Facility limit: Circa £3,500,000
- Debt: Contractual
In this case, Enness was approached by a highly profitable business servicing the maintenance industry, supporting both on-shore and offshore projects. The business had recently taken on significant contracts at a scale they had not yet attempted. Confident in their ability to undertake these high-value projects, the business faced three core challenges.
Firstly, the business’ incumbent Invoice Discounting provider, a well-known high street bank, had the business capped at a facility limit of approximately £1,000,000. This gave the business minimal headroom to support its growth and, thus, ever-increasing working capital commitments. This problem was further compounded by the standard long payment terms that the business operated, meaning that there was a significant lag from invoicing the client to payment. This put further pressure on the businesses working capital. Finally, the quality of the business debtor book was an issue for most lenders - with a high concentration of international clients from Italy to Africa and with the nature of the debt being contractual (ongoing payments as opposed to payment upon delivery), many lenders could not accommodate for an ID line at the level the client required to support their growth trajectory.
Enness, leveraging our expertise, took time to fully understand the nature of the client’s debt. Whilst contractual, Enness identified that the invoicing cycle was predicated on a time-sheet basis, producing clear billable hours to the client – therefore appropriate for a sizeable invoice finance facility. Enness then sourced a lender comfortable with both the significant exposure to international jurisdictions and an understanding of the unique aspects of the industry. Finally, the lender was able to agree to a facility limit of circa £3,500,000, providing the client with significant headroom to grow into and ultimately better manage their working capital cycle.
Enness’ position in the market as an international finance brokerage with a specialisation in supporting non-traditional clients in non-standard situations afforded us the agility to understand the client's specific requirements in this caseultimately. Furthermore, with unprecedented access to the UK lending market, Enness had relationships with specialist lending partners that were able to support such a unique transaction.
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