Case Study: A Medical-Surgical Company

Case Studies
Case Study: A Medical-Surgical Company

Case Study: A Medical-Surgical Company


cs-medsurg-200A Medical-Surgical company reached out to New Direction Capital during its 30th year in business.  The economy had impacted the growth of the business, the bank he was dealing with over a decade was in trouble and revenue was flat for the past 4 years.  It was a viable business and the owner needed to figure out how to reduce expenses and find new capital to grow over the next 3-5 years.

With the company’s bank in turmoil, it was time to find a new way to structure their finances and develop a solution to capitalize the company.  The client had a complicated situation owning over 7 companies impacting their lending capacity.


First, New Direction Capital working as virtual Chief Financial Officer met with the client to understand their vision for the business and understand the business challenges, together we chose to target five specific areas:  capital planning, re-structuring existing debt, developing a working capital facility and forging a new bank relationship.


Capital Planning:

Through analysis and research with the client, NDC was able to find a solution to their cash flow inconsistencies.  This plan was developed and communicated to the client’s customers and to the bank.  NDC as CFO was able to cut down on the time with bank relations and also have confidence and peace of mind moving forward.  We were able to secure a line of credit that would handle larger cash needs in off months and the bank was able to understand the business justification in why the larger line was needed.

Restructuring Debt

The client and landlord had a close relationship over the years.  NDC as virtual CFO was able to work with advisers and counsel to negotiate and structure the purchase of the location which included negotiations of a private note.  During this process, NDC saved client over 30% in the purchase price and was able to secure the note at 4.5%; well below the offered bank rate.  This secured the location, added collateral to the client’s net worth and he was able to improve his net worth at the time of closing.

Developing a working capital facility

Forge a new bank relationship
The client’s bank was having very difficult times and had stopped lending but still was working with client to maintain their business deposit relationship.  NDC saved the client time and money by developing a new banking relationship with a bank that was healthy and would work with them over time with additional capital when needed.  NDC as Chief Financial Officer worked with the bank to educate them on client’s business model and timing of cash flows.  We were able to save the client time by researching the bank and coming up with a final few candidates to select.

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