A Jarrow company is celebrating having done the honourable thing by paying back £950k in debts – and keeping all 22 workers employed during the recession.
Timberline in Riley Street, which buys reject timber from sawmills to make into wooden pallets and packing cases, was badly hit by the recession in 2010 – and a log shortage.
We didn’t want to take the easy option by just starting again. Instead be wanted to pay back as much as we could.Brian Moyse, managing director of Timberland
The double whammy came shortly after it had invested £300,000 to expand and it received a large tax bill – which put it on the verge of going out of business.
Keen to do the honourable thing – and not simply closing the business to wipe debts – directors entered a Company Voluntary Arrangement.
This meant they would have to pay back creditors 33p for every pound they made.
But bosses managed to do even better, and when they arrangement ends next month they will have paid back 96p in every pound.
However it was nearly a different story when Timberline’s bank decided to reduce the percentages it advanced on invoices – nearly causing the 27-year-old company to go bust.
But Newcastle-based Ultimate Finance came to the rescue and provided it with a new £250k invoice facility enabling the company to trade and rebuild.
Brian Moyse, managing director of Timberland, said: “Everything seemed to hit us at once in 2010, causing us sleepless nights. However, we did not want to take the easy option by just starting again as a new company. Instead we wanted to pay back as much as we could to our creditors, who were very understanding. The experience has caused me to lose faith in high street banks, as they did nothing to help and support us during the difficult times. Fortunately Ultimate Finance could see the potential of the business and they saved the company by coming to our rescue.
“Due to their help, the hard work of our team and the patience of the creditors, we have been able to pay everyone back and the business is going from strength to strength.”
David Paget, regional director of Ultimate Finance, added: “More and more people are coming across the high street banks’ unwillingness to lend which is putting unnecessary pressure on SMEs. For some reason they can’t or don’t want to see the potential in a business.
“ That is why so many are turning to asset-based lending to help with their cashflow. Timberline is a great business that was hit by circumstances beyond its control. It was clear to see that it is a solid business that just needed some help to get through a tricky patch and we were delighted to help.
“It’s been trading for 27 years and I’m confident there will be many more years of success ahead of them.”