Assignment
A construction company had overextended itself with extensive capital expenditures, and needed additional financing to bridge a cash shortage. The company hired Schreiber Finanz to help them secure bank financing and temporarily raise their credit limit under acceptable conditions.
Challenge
High prepayments received from a large contract had disguised the cash-squeeze and postponed it by more than a year after the capital expenditure was spent on an extension of their own premises. And on top of the cash squeeze, the P&L showed a small loss for the previous financial year.
Solution
First, we defined and applied the method to correctly account for the status of the large contract mentioned above. We made visible the cash-drain of several million francs due to the use of the prepayments and showed that the cash from these prepayments had been used between one and two years before for the extension of the company’s premises. Second, we established a financial plan for the next three years, so that management could accurately forecast when and how much extra credit would be needed.
Results
Based upon Schreiber Finanz’s work, the company was able to convince the bank not only to extend the existing financing under relatively favorable conditions but also to grant them additional credit limit temporarily. The company’s owners and managers were so pleased with our work that they have continued working with Schreiber Finanz founder Christian Schreiber as their “CFO for Hire”.