CAL gets cash flow support

ENGINEERING firm CAL Systems has been given a £200,000 Enterprise Finance Guarantee loan to secure its future after a client suddenly changed its payment terms.

Chester-based CAL arranged the EFG loan, where the government guarantees 75% of any loans made, with the bank covering the remaining 25%, with NatWest.

It needed extra funding after one of its clients made an unexpected change to its payment terms extending them from 30 days to 120 days. 

The change put pressure on CAL’s short term cash flow, and threatened its ability to fulfil future contracts, jeopardising the jobs of its 35 employees.     

Managing Director Frank Ainsworth said: “We have been trading for 20 years and during that time we established a strong customer base that grew year on year. Suddenly we faced a situation where some of our blue chip clients considerably extended their payment terms. 

“This combined with the difficult economic conditions put a strain on our finances as it would with most small and medium sized companies. The EFG loan was particularly attractive as it provides us with flexibility to cover our contracts and has given us the necessary financial stability to secure jobs and provide steady growth in what are difficult trading conditions.”