Case study
Case study: Delivering financial stability with a Redundancy Payments Loan and TTP arrangement
Background
A North West based manufacturing company faced a sudden and significant reduction in its margins, driven by sharp price increases in key raw materials that were essential to the firm’s production process. The downturn led to the business recording significant net losses and endangered the livelihood of its 50+ staff.
To stabilise the business, the Directors developed a turnaround plan centred on consolidating operations. This required closing one of the two trading sites and moving to a single, more cost‑effective location. The closure would reduce overheads and generate headroom through statutory redundancies, enabling the business to regain control of its cost base.
Challenge
To implement the plan, the Directors sought an extension of their existing banking facilities to fund the transition and redundancy obligations. Unfortunately, after review, the bank were unable to extend their lending further at that time.
As trading remained difficult and liquidity tightened, the business was unable to meet its ongoing tax obligations and HMRC liabilities began to accumulate. With cash flow under increasing pressure, external support became essential to prevent further deterioration.
Solution
Referred to Leonard Curtis, the company sought advice as to their options, and whether there was any scope to implement their turnaround strategy. The Business Advisory team quickly recognised that the company may be eligible for a loan from the Redundancy Payment Office (RPO) and that a Time to Pay (TTP) arrangement could be sought with HMRC.
Business advisory analyst, Awaes Ali, took the lead on the engagement. After assessing the requirements, the team entered direct discussions with the RPO and successfully negotiated a £39,000 interest free loan repayable over 36 months. This provided the funding needed to complete six statutory redundancies and significantly improve the company’s long-term financial health.
Following a detailed financial review, the team also negotiated a TTP arrangement with HMRC. A 36‑month agreement was secured for liabilities totalling over £135,000, creating vital breathing room and relieving immediate cash flow pressure.
Outcome
The combined loan from the RPO and TTP arrangement provided the company with a sustainable platform to carry out its plan and drive long-term recovery. Without these agreements it’s likely that the business would have failed. The agreements improved cash flow, protected the ongoing trading operations, and allowed the Directors to implement necessary changes without further financial strain.
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Leonard Curtis is a trading style of Reach Commercial Finance Limited, registered at Riverside House, Irwell Street, Manchester, M3 5EN. Company Register number is 09056450. Reach Commercial Finance Limited is authorised and regulated by the Financial Conduct Authority, FRN: 753686. Reach Commercial Finance Limited is an authorised credit broker and not a lender. We work with an unrestricted number of lenders to find a potentially suitable arrangement for your consideration. ICO registration ZA069234 and you can check via www.ico.org.uk. We will receive commission from lenders. Different lenders pay different amounts depending on different commission models. For transparency we work with the following commission models: fixed fee, fixed rate of commission, percentage of the amount you borrow and rate for risk (this is based on the risk profile of the business). Further details of the commission model, calculation and amount will be disclosed to you throughout your customer journey. Privacy notice.
Leonard Curtis Legal Limited is a limited company, registered in England and Wales with registered number 09820186. Registered office: Riverside House, Irwell Street, Manchester M3 5EN. Leonard Curtis Legal Limited is registered with the Solicitors Regulation Authority with number 626004.