Rebuilding your cash flow – DBD Distribution Ltd
Whilst many companies have been hit hard by the recession, those businesses directly influenced by the housing market have particularly suffered as the millennium boom came crashing down.
That is certainly the case for one of the UK’s premier suppliers of kitchen appliances to new build homes, DBD Distribution Ltd, who have had to adjust from servicing customers at the height of the housing boom to dealing with a shortage in demand and problems in the banking sector.
Established in 1988 and based in Hemel Hempstead, DBD’s owners have experienced it all from the recession of the early 1990s to the infamous Buncefield fire of 2005 – during which they had to relocate for a year while their headquarters were rebuilt – but today’s recession has posed further challenges still.
The sudden slump in demand was arguably the biggest, and with credit insurance no longer available on their top clients, Financial Director, Bob Barnard, had to plan the company’s future with a funder that was concerned about their sector.
He explained: “House builders are around 30-60% down compared to a few years ago. This has resulted in stiff competition and sadly a few failures among competitors.”
The perceived sector risk and lack of credit insurance drove the business’ funder to make the general decision to reduce exposure in the housing sector, leaving DBD with the challenge of either working with a reluctant partner or finding an alternative funding solution.
The lack of credit insurance and contractual nature of the business were initial stumbling blocks in the quest for new funding, but Hilton-Baird was able to provide invaluable expertise at a critical time for the business.
“A year ago our whole book was insured but, today, it’s nearer 50% as a result of issues with the major house builders,” Bob continued. “In turn, it has had an impact on funders further down the chain and this was reflected in the initial terms we were offered.
“Our introduction to Hilton-Baird came at the right time. The service was superb; I doubt we’d have found such a good funder without their help. Their ability to understand us and our needs, and then match this to available funders was the expertise we needed.”
Recognising DBD’s greatest asset as its sales ledger, Hilton-Baird was able to introduce an invoice financier that could not only provide the tailored funding solution for DBD’s operating needs, but also one that could appreciate the drive and passion its management team possesses.
After a detailed analysis of DBD’s customer base and operating pressures, Hilton-Baird selected two potential funders that recognised the business’ potential. Assisting them through the selection process resulted in DBD gaining a supportive funder who is prepared to work with them through the recession, and is delivering a £2m invoice discounting facility matched to their operating requirements.
Bob concluded: “Invoice discounting is an ideal mechanism to provide us with funding for our day-to-day needs. It’s the perfect funding solution for DBD.”
For more information on DBD Distribution Ltd, visit their website at www.dbd.co.uk.
If, like DBD Distribution Ltd, your business is struggling to access the funding you require to succeed Hilton-Baird Financial solutions could help. Simply contact our team on 0800 9774833 or info@hiltonbaird.co.uk. Alternatively, request a call back and one of our funding consultants will contact you to discuss the best funding solutions for your requirements.
