Case studies
Case study: Restructuring debt secures long-term stability for a dental practice
Background:
- Built up short-term borrowing on top of core practice debt
- Pandemic pressures and refurbishment costs added further strain
- Monthly repayments were absorbing most available cash
The client, a sole trader running a well-established dental practice, had accumulated short-term borrowing on top of the debt originally used to purchase the business. As repayments grew, they began to absorb the majority of the practice's available cash, leaving the client unable to keep pace with HMRC obligations and in need of a long-term solution.
Our Approach:
Referred by their accountant, the client was introduced to Leonard Curtis. Recognising the tax position needed addressing alongside the borrowing, the Business Advisory were engaged to negotiate a Time to Pay arrangement with HMRC, bringing the arrears under control and easing immediate pressure.
In parallel, the funding team sought to consolidate the client's short-term borrowing into a single, longer-term facility with a high street bank. While the refinance was being finalised, a temporary extension to the client's existing overdraft was negotiated by the funding team to bridge cash flow and keep the practice trading comfortably throughout.
The team also worked closely with the client's accountant and a tax adviser to explore incorporating the business and transferring the practice premises into the new company structure. An independent valuation was obtained to confirm the transfer was tax-efficient, ensuring the client's long-term position was protected as well as their short-term needs.
The result was a £714,000 refinance facility that consolidated the client's borrowing and replaced a monthly finance burden of close to £30,000 with a single repayment of around £5,500. Combined with the resolution of the HMRC arrears and the tax-efficient incorporation and property transfer, the practice moved onto a sustainable financial footing with significantly improved monthly cash flow.
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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.