Communication key for the ABL sector

Communication key for the ABL sector

Hilton-Baird audit uncovers winding-up petition
Hilton-Baird Audit & Survey
Communication key for the ABL sector

With the cash flow challenges on businesses across all sectors well documented at present, there has been a growing importance for lenders to maintain close contact with their clients to ensure their facilities continue to offer the desired level of support, and ultimately that the client doesn't move outside of your lending criteria.

One of our funding partners instructed Hilton-Baird Audit & Survey to audit a client of theirs in the knowledge that the cash flow pressures facing the business had been escalating. On closer inspection however, the extent to which the business had been feeling the pinch soon became clear.

Unknown to the lender, the client had accumulated Crown arrears that far exceeded the cash flow capabilities of the client, prompting HM Revenue & Customs to issue a seven day letter that had since expired. This made it crucial that our auditors were able to collate all the facts as quickly and accurately as possible in order to provide the information required ahead of the lender's consequent emergency meeting with the client, which was scheduled for the following day.

From the outset the team encountered a series of challenges, including the company's financial controller calling in sick on the first day. With the help of the staff however, our auditors were soon able to access the critical information and began work on the report.

With the pressure on, the completed report was submitted to the lender well in advance of their meeting, giving them sufficient time to review and tailor their approach accordingly.

What this case study proves is that today, more than ever, lenders must maintain communication with their clients as much as their time allows them, helping to nip potential problems in the bud and enabling the lender to feel confident about their risk.