We specialise in raising finance for businesses that are currently underperforming or are financially distressed and need immediate help.
In our experience - companies in a turnaround or recovery cycle, often find it extremely hard to raise finance to make their renewal strategy work. The business’ bankers may have instructed accountants to carry out an ‘independent business review’ which may have come to an unsatisfactory conclusion - perhaps due to a lack of understanding of your business model, its inherent value and commercial potential.
That’s the time to involve TMP. We are here to help you!
It is very important to understand (and accept) that banks need to follow sensible and responsible recovery procedures as they – like you – need to maximise their interests.
Unfortunately, their prudent banking needs and recovery objectives often do not match the businesses needs in a crisis.
The good news is there are alternatives and we can help you find them.
Fund raising - we can invariably help you.
We were the first firm to specialise on turnaround fund raising. We see it as a pre-requisite to make a solvent or an insolvent turnaround work, and we have done this pretty successfully for many years.
Almost as a rule, in all the turnarounds we are involved in we usually have to inject some new finance into the deal.
The difficulty is there’s usually not that much finance around in the timescales of a turnaround when a business is in a financial crisis.
There are very few funders who specialise in distressed equity investment and to a lesser extent distressed debt and that in its self is a real challenge to overcome.
However – a major part of our success has been to work very closely with turnaround financiers that have the experience and appetite to invest in and lend to underperforming and distressed situations.
Our extensive contacts with turnaround financiers and our reputation and long track record with them means that we have unparalleled access to funding solutions:
Asset based lending (“ABL”)
We have extensive links at director level with the main providers and are able to quickly mobilise potential funders upon clients’ instructions.
ABL lenders focus on ensuring their lending is secured on the business’s assets – usually fixed assets, receivables (debtors) and stock – at the current independent valuations.
Each asset class attracts its own risk and therefore the percentage advance levels vary according to that risk.
However, TMP’s market knowledge allows us to work with the right lender who has the appropriate appetite for the particular asset base involved – to obtain the highest possible funding advance.
We also aim to get “comprehensive” ABL financing if it is possible. In other words finance over all the possible assets available, not just one asset class.
Invoice Discounting and factoring
Our key strategic partnerships with the main providers and knowledge of their deal likes and dislikes give us (and as a result our clients) unique access to the best deals.
Equity and mezzanine financeWe work very closely with a number of equity investors who invest in underperforming and distressed deals whose fundamental objectives are to:
save the core business,
re-build it, and
create long term value.
These investors range from very significant private equity funds with substantial funds available to small niche funders and high net worth individuals. They all have their own individual investment sweet spots and deal parameters.
Our job is to match our client’s needs with their investment objectives in a structure that meets both parties’ requirements.
TMP partners often invest in turnaround deals alongside other equity investors – so we are willing put our money where our mouth is (but only on the express (and extremely important) condition that we have no conflicts of interest).
The type of turnaround finance deals we work on
We work on a wide range of deals – and they all depend on the commercial, legal and financial position of the business we are advising.
They range from
- Refinancing to avoid insolvency
- Buy outs from insolvency which are almost always are “pre-packaged” in advance of the insolvency process as part of the turnaround plan
- Funding businesses that have proposed or approved creditors’ compromises. This can include a solvent compromise (with no formal insolvency) or where there is a formal insolvent compromise such as a company voluntary arrangement (”CVA”) (in the UK)
- Funding (effective) debtor –in-possession – for example funding a trading insolvency
- Rebanking of a secured lender position where a lender wants to exit their position.
- Mergers and acquisition (usually) where a financially strong company acquires an underperforming or distressed business. We work closely with entrepreneurs who have a buy and build strategy. We assist them by providing a complete service including:
- Deal origination and target searches
- Acquisition funding and funding for future working capital
- Deal structuring
- Post acquisition management support
- Distressed debt acquisition
- Funding purchases of distressed stock and inventories
Turnaround Finance Guideline
TMP has authored the Turnaround Finance Guideline which is used as the Institute Of Chartered Accountants in England and Wales (“ICEAW”).
Please download the turnaround finance guideline to understand the principles of turnaround finance.