Case Study 7
Working Capital Intelligence
Our client was a Worcestershire based manufacturer and distributor of premium fruit purees which are supplied to the drinks industry and can be used in cocktails, deserts, smoothies etc. Annual turnover is circa £1 million. Due to the seasonality of the business, additional working capital facilities were required.
Introduction
The client was seeking to purchase a consignment of passion fruit originated from Ecuador. The goods were held in Rotterdam and payment to the UK agent of the grower in Ecuador was required within two weeks in order to secure delivery of the product. Due to seasonality of its business, the client didn’t have sufficient working capital to pay.
Existing working capital facilities were provided via a combination of term loans which were being amortized and Directors Loans. The Directors were required to restructure the provision of working capital and provide ongoing revolving facilities which have the ability to increase in line with growth in turnover of the business.
Challenges
A Purchase Order Finance facility was provided which enabled the client to pay for the consignment of passion fruit. Security was via a debenture and a PG. The client liked the flexibility and standby nature of the facility and will use the facility for ongoing transactions. Ricosta is now seeking to provide a receivables finance facility which will provide the client with additional working capital facilities.
