Debt Servicing Cost Reduction by 23% for a Construction Wholesaler
Client had a problem with 14 different credit lines. We consolidated liabilities and negotiated new margins in 3 banks.
A wholesaler from Ząbki near Warsaw was drowning in papers and interest from fourteen different loans. Instead of dealing with material sales, the owner spent days keeping track of repayment deadlines in six banks. We organized this mess, combining everything into three clear contracts.
The challenge
BudowaPolska Sp. z o.o. entered 2024 with a baggage of 14 credit lines. The total amount of debt was 842,000 PLN, but the biggest problem was operational chaos. Each loan had a different repayment date, a different margin, and a different way of calculating commissions. As a result, the accountant lost 11 hours monthly simply processing transfers and verifying statements from different accounts.
Due to this lack of consistency, the company paid an average of 3.2% more interest than resulted from the market conditions at the time. Worse, two banks blocked the possibility of taking out capital for seasonal stock purchases because they saw too much debt dispersion. Financial liquidity dropped to a level where payment delays to suppliers reached 19 days, risking the loss of trade discounts.
Our approach
Our team, which includes people with experience in bank analytics, started with a full audit of contracts. We analyzed 124 pages of loan documentation in 4 business days. We looked for hidden costs for early repayment and commissions for closing technical accounts, which banks often add in fine print. (By the way, most entrepreneurs never look at these tables, and that's where most cash leaks).
We prepared one common financial operat for new bank partners. Instead of asking for a loan, we showed hard data on the wholesaler's turnover from the last 18 months. Negotiations were conducted in parallel in 4 institutions, which allowed us to push the margin to a level the client was unable to obtain independently as a single entity without Vistula Risk Solutions' support.
The solution
Ultimately, we closed 11 out of 14 credit lines. The remaining 3 were consolidated into one product in a bank that offered the best terms for the trade industry. We also introduced a simple liquidity monitoring sheet that shows the owner the cash status in real-time. Thanks to this, they no longer have to wait for reports from the accounting office to know if they can afford a new steel delivery.
An additional element was negotiating a 4-month grace period in principal repayment for the main line. This allowed BudowaPolska to buy 12% more insulation materials before the fall price hike by manufacturers. The entire process from the first meeting to signing the new contracts took exactly 87 days.
Results
The wholesaler regained control over cash and stopped paying penalty interest for missed deadlines. The new debt structure is simple and cheaper to maintain.
Timeline
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August 2024Audit of 14 loan contracts and calculation of hidden costs.
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September 2024Preparation of a negotiating package for 4 commercial banks.
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October 2024Signing consolidation agreements and paying off old liabilities.
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November 2024Implementation of an internal financial liquidity control system.
"Vistula Risk Solutions knew how to talk to banks in their own language. I wouldn't have fought for such terms myself, and the paperwork simply overwhelmed me."