Case Study: Empowering Growth with Cash Flow Loans for Business

The Challenge

A well-established recycling operation in Bournemouth was grappling with inconsistent cash flow, rising operational costs, and a growing need for investment in technology and equipment. These financial strains affected the company's ability to maintain day-to-day operations and invest in much-needed improvements. Recognising the need for external support, the client turned to Honey Asset Finance - known for tailored funding and cash flow loans for business.

Despite strong revenue, the business was highly geared following investments made during Covid-19 to boost operational efficiency. Unfortunately, key elements of that strategy had failed to materialise, and the post-pandemic downturn in income meant the business was haemorrhaging cash. With only a minimal overdraft supported by the bank, which was consistently in use - the Directors had resorted to using personal and corporate credit cards to cover trading expenses and essential costs like tip fees. It became clear that the business needed a capital injection to consolidate expensive short-term debt and create a much-needed repayment holiday to relieve cash flow pressures.

Our Solution

The collaboration began with open and transparent discussions, allowing Honey Asset Finance to fully understand the client's operational and financial challenges. Working closely with the company and their accountant, we developed a detailed financial overview and forward-looking cash flow projections. These clearly demonstrated repayment capability and mapped various lending options to determine the most manageable support plan.

We structured a cash flow loan using Honey Asset Finance's in-house fund, providing a six-month interest-only facility with a final bullet repayment one month later. This allowed the business to recover without the immediate burden of repayments. Together with the accountant, we identified which creditors would deliver the greatest cash flow benefit when paid off and structured the loan accordingly - agreeing a defined list of amounts and recipients.

Security terms were reviewed and mutually agreed by all parties, enabling fast execution and delivery of funds.

The Result

Following approval, the business was able to take swift action. Funds were allocated to the purchase of new recycling machinery, improving efficiency and increasing output. Investment in technology helped streamline internal operations, and additional staff were brought on board to support improved service delivery.

These strategic moves helped stabilise the business's cash flow, reduced reliance on expensive short-term debt, and laid the foundation for sustainable growth. Thanks to the breathing room created by the tailored loan, the company returned to a strong cash position within four months.