Case study
Case study: Protecting an online retailer amid funding withdrawals
Background:
• Online retailer based in North West
• Faced significant cash flow crisis due to the sudden withdrawal of critical lending facilities
• £1.2m HMRC liability
The client, an established online retailer, was recommended to Leonard Curtis by a contact who had previously worked with us and was also a fellow online retailer. Having achieved a 69-month term for this client, the director reached out for assistance when faced with an immediate cash flow crisis.
Until July 2024, the client used a £1 million credit facility to manage cash flow and pay quarterly VAT to HMRC. The sudden withdrawal of this facility created an immediate £1 million shortfall. Further compounding the situation, in November 2024, the client's bank ceased working with them, leading to an immediate loss of £900,000 in overdraft and trade loan facilities. The combined £1.9 million withdrawal of funding severely constrained the company’s ability to meet VAT and supplier payment obligations.
The client received a visit from HMRC officers, intending to list the company’s assets for auction to recover debts. The director, keen to protect the business, sought to reach an agreement with HMRC. The debt size meant HMRC would typically consider only a 12-month repayment term, which was not feasible for the client in their current cashflow position.
Our Approach:
Leonard Curtis’ restructuring and insolvency team supported the director by discussing insolvency options, should they be needed, whilst the business advisory team worked to negotiate a favourable Time to Pay (TTP) arrangement with HMRC.
Using our extensive experience working with HMRC, we engaged in a proactive, negotiation to secure a TTP that would avoid the removal of company assets while giving the business the breathing space needed to stabilise cashflow.
We successfully negotiated a three-year TTP arrangement for a £1.2 million debt. This strategic arrangement enabled the client to continue trading, protecting five jobs, keep its warehouse stock, and avoid a forced insolvency process.
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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 a 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.