SFP Forensic, a division of national business recovery and turnaround specialists SFP, has launched two new services for the Asset Based Lending (ABL) sector to add to its portfolio of forensic accounting services: the pre-lend survey; and the post-lend audit.
The pre-lend survey, as the name suggests, is designed to help lenders make the right decision before lending to a new client as Robert Welby, SFP Forensic’s Managing Director explains: “We use our forensic accounting skills and expertise to review the business and accounting records in order to provide a detailed report to lenders before they advance,” he says.
Even when the customer’s accounting records are poorly maintained or out of date, SFP Forensic can reconstruct them to provide the most accurate picture of their current position, and so help the lender arrive at a better informed decision Robert says: “Put simply, we can help steer them away from the poorer managed companies, and towards the lower risks, thus adding value to their own decision making and enhancing the quality of their client portfolio.
“One of our main objectives is to help identify unsuitable prospects for our clients whilst ensuring that viable businesses are successful in obtaining funding.”
As well as the pre-lending survey, the company has launched a post-lend audit to monitor the performance of a lender’s customer at any point of the funder/client relationship: “We can review a client’s position quarterly, six-monthly, or indeed at any stage to ensure their risk profile hasn’t changed,” he says.
The two new services have been spun out of SFP Forensic’s highly successful independent business reviews (IBRs) used by the majority of major lenders. IBRs are called for when the lender has a specific concern about an existing customer, requiring a more detailed investigation. This may be because the customer is looking to increase his loan, and therefore the risk to the lender will become considerably greater. It might alternatively be if the lender has a concern over the ongoing viability of their customer.
In either case, SFP undertakes a comprehensive review of all facets of the business, past, present and future. A detailed report and findings are prepared for the lender with recommendations on how to move forward. Robert says that his team often uncover issues that lenders might otherwise not be unaware of: “We review all manner of documents including contracts with suppliers, ownership of assets and even the lease on any premises, all of which can impact on the viability of a business and its ability to meet its ongoing obligations.”
Robert stresses that IBRs are usually far from adversarial. When undertaken by invitation of the directors, they can help put an ailing business back on track. “We can often be on site within 24 hours,” he says, “and can assist directors by working with our colleagues in the SFP Group in helping to turn businesses around. We can improve an underperforming business’ outlook and even stem cash flow difficulties.”