This Hertfordshire based recruitment company specialises in temporary placements in the health and social care sector. The company contacted us to discuss the financial difficulties facing the company. A meeting was hastily arranged and our regional manager met with the director at their premises in February 2016.
The company was encountering financial difficulties due to health and social care cutbacks imposed by local government authorities resulting in reduced profit margins for the company.
The company had historic HMRC liabilities and had agreed an informal short-term time to pay arrangement with HMRC, but the £5k per week repayments to the crown were putting an enormous strain on an already stretched cash-flow.
With HMRC debts of c£220k, a bank overdraft of £25k and local authorities delaying debtor payments to the company, the financial situation could not be sustained.
At the initial exploratory meeting with the director all options were discussed and the director was provided with a detailed solutions report within 48 hours of the meeting, recommending the company proposed a Company Voluntary Arrangement (CVA) to its unsecured creditors. The proposal intended to offer a sensible, affordable monthly repayment to creditors, at a level the company could comfortably afford, over an extended period of time.
The KSA team handled all creditor liaison and worked closely with the director to set out prudent financial forecasting to demonstrate a viable business moving forward and an ability to repay the creditors a minimum of 40p in the £ over an extended period. During the CVA proposal period the company set about cost cutting exercises and worked hard to expand its customer base.
The proposal was accepted by creditors and the company entered a Company Voluntary Arrangement over 5 years protecting jobs and securing the future of the business.