A Preston-based lighting company was on the brink of closing down when its bank pulled the plug on further finance.
But now it has been saved and is looking forward to expansion after a vital loan from a Manchester-based company.
I was so shocked to receive the email out of the blue and was upset the person I dealt with on a personal basis hadn’t had the courtesy to pick up the phone and talk to me.Paul Hindle
Lumenata Lighting Design – which provides lighting design and installations for both commercial and domestic customers – is now expecting to increase turnover from £240,000 last year to more than £600,000 and create new jobs.
Managing director Paul Hindle initially thought he would have to close the business and make his four staff redundant.
He received an email from the manager of his high street bank at 7pm one evening advising him that, with immediate effect, they would no longer be funding him.
The shocking news followed a difficult 2014 for Lumenata Lighting Design.
Paul said he had been affected by a number of personal issues which had an impact on the business. Although the bank was kept fully aware of the situation, it did not like what was happening and so no longer wanted to fund it.
A new factoring facility of £100,000 was quickly agreed with Manchester-based Ultimate Finance, enabling Lumenata Lighting Design to win a number of major contracts.
Paul said: “I was so shocked to receive the email out of the blue and was upset the person I dealt with on a personal basis hadn’t had the courtesy to pick up the phone and talk to me.
“Naturally I went into panic mode because without invoice finance I could not operate the business. I was dealing with some large contracts and while I was waiting to be paid for completed jobs, I needed working capital to buy components from the manufacturers for the new projects I had won. I was left completely in the lurch without any warning.”
The regional director at Ultimate Finance, Clive Briggs, said: “It was plain to see that the company had encountered problems due to Paul’s circumstances, but it was clear that he had overcome them and was able to concentrate fully on the business.
“Unfortunately the company’s bank did not recognise the cause of the blip nor the potential of the company and literally left them high and dry.”
Mr Briggs said there were still too many instances where banks were reluctant to lend, or suddenly withdrew backing for firms.