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This week I was able to help one of my clients, a professional services company, obtain a line of credit and a term loan to recapitalize their balance sheet. Before I was hired, my client was having a difficult time managing and financing their growth. For each of the past three years, the company had doubled sales. As the company grew it was experiencing symptoms of infrastructure outgrowth. As predicted by our publication, The Danger Zone, Lost in Growth Transition, the company was rapidly moving towards the stage of the business cycle where cash needs of the company exceed available cash: The Danger Zone.

Working with the business owner, we developed a number of tools and processes to rebuild the company’s infrastructure in order to manage growth, profitability and cash flow. Among the infrastructure tools we implemented was a 12 month rolling forecast. This forecast helped the business owner model the business over the next year to determine the effect on the income statement, balance sheet and cash flow of the various strategic business decisions we were contemplating. Not only did this rolling forecast give us a clear financial roadmap for where the company was going, but it also provided us the visibility to understand the company's cash needs.

Once we completed the infrastructure improvements, including our 12 month rolling forecast, we met with the bank to review our financing needs. We reviewed our business plan with the bank and discussed in detail the improvements made. Using our 12 month rolling forecast as the basis for our financial presentation to the bank, we were able to clearly demonstrate how and why the company's performance would increase, its financing needs and cash flow. Based on our comprehensive business plan, we were able to 1) secure an adequate line of credit to fund the company's short-term operating needs, 2) secure a term debt to recapitalize the balance sheet and improve liquidity and 3) consolidate our banking with one bank.

As a B2BCFO, we pride ourselves on helping clients navigate the process of building profitable companies with solid infrastructure. We provide banks and other lending institutions with confidence and we develop business cases to show how our client’s cash flow can support lines of credit and term loans. Cash. We Help You Get It.