Salvus Harbor Financial LLC

The issue

 What we did

 Painting contractor can’t understand why credit lines are maxed, there is no money and the bank is talking workout.

 Major accounting errors in WIP, mis-pricing and high cost issues, high overhead, declining shareholder value, negative working capital of $500K, losses approaching $300K, gross margin substantially below market, limited liquidity – less that $100K, leverage exceeding 11:1, Z score negative (indicating bankruptcy).

Calmed banker buying 60 days to establish a formal plan, reduce sales by $2 million, build cash resources immediately to $200K, install new accountants and accounting systems, slash overhead costs and resulting cash needs, move lending relationship with higher credit lines, spin off related fixed asset and real estate operations creating added capital, releasing “trapped cash” in inventory and accounts receivable, restructure balance sheet, create permanent working capital improvement plan.

Sales nearing $10 million, profits exceeding $300K, shareholder value up six fold, working capital nearing $1 million, ROE 37%, leverage down to 4:1, Z score in strong category, bankers extending credit to meet needs, owners taking bonuses for the first time in nearly 10 years

 Large interior contractor has “an accounts receivable problem” – i.e. low cash resources and maxed credit lines

Receivables were a problem, but also negative liquidity levels, improper lending structure, insufficient working capital, ROE of 5%, stainable growth of 5%, cash flow coverage of LTD .8, profit is .4% of sales 

 Restructure the banking relationship, improve pricing methods, establish customer credit and profitability system, spin off fixed asset company, negotiated new credit terms and lower interest rates.

Sales up by nearly $10 million, ROE 21%+, liquidity over $1 million, growth capacity 21%, working capital up $200K, profit 1.1% of sales, over $300K 

 Manufacturer struggling financially, bankers calling loans, bankruptcy appears highly probable

 Losses approaching $200K, gross profit less than 7%, Z score -5, working capital -$280K

 Focused management on profitable lines and customers, improved cost accounting identifying production mistakes and high costs, restructured balance sheet and loans, secure new lender

 Profits exceed $100K, new lender with adequate credit lines and term loans, Z score of 1, working capital is positive and growing, ROA is 22%, shareholder value up 40%.

 Contract aviation firm cannot find a new lender and has excess fixed asset capacity as collateral values are falling, current bank calling in loans

 Ineffective accounting systems, poor pricing, inadequate and poorly designed business plan, low liquidity, balance sheet problems created by poor advice relating to real estate, loan broker talking to all the wrong sources.

 Rewrite the business plan, introduce, negotiate and close new lending package, improve liquidity, assist in rewriting long term land lease.

New lender with proper terms and conditions, higher liquidity, release of personal asset pledge, company poised to return to profitability.