Client Overview
The borrower is an end-to-end ad-tech marketing platform focused on serving enterprise clients. The company facilitates the planning, execution, and management of large-scale marketing-driven campaigns for international and national agencies for major brands.
Situation
Shortly after securing a credit facility, the borrower encountered liquidity issues, prompting immediate concerns regarding cash flow sufficiency, financial reporting, and internal controls. These concerns were further amplified as the lender worked to understand better the borrower’s financial position due to the borrower’s complex business operations and accounting practices.
To address these issues, the lender engaged MCA Financial Group to independently assess the borrower’s financial condition. MCA provided critical insight into liquidity, accounting reliability, and operational risks, equipping the lender with the information necessary to assess exposure and determine appropriate remedies and next steps.
Engagement Focus
MCA Financial performed a financial diagnostic and developed a near-term cash flow forecast. Key focus areas included:
- Engaging with management to assess financial systems and workflows
- Reviewing financial statements and cash flow data to verify reporting
- Clarifying accounting processes to enhance lender visibility into the company’s financial condition
- Reconciling key accounts and identifying discrepancies in deferred revenue, assets, and recognition timing
- Addressing data reconciliation challenges across multiple financial platforms
- Delivering a lender-facing report outlining financial risks, reporting deficiencies, and liquidity considerations
Challenges & Execution
Manual systems and limited internal accounting capacity hindered access to timely financial data. MCA collaborated with management to implement pragmatic data collection solutions and improve transparency. Through ongoing engagement, MCA aligned with management on critical reporting adjustments and resolved initial differences in interpretation and presentation.
Outcome
MCA Financial Group’s independent assessment gave the lender a clear and objective understanding of the borrower’s financial standing and risk profile, enabling the lender to determine a strategic path forward. The borrower subsequently executed a sale transaction with a strategic buyer, achieving an outcome that resulted in full repayment of the outstanding loan.
Value Delivered
- Delivered objective, forensic-level financial clarity to support lender oversight
- Enhanced transparency into liquidity constraints, reporting weakness, and accounting risks
- Supported lender decision-making at a pivotal credit inflection point
- Facilitated a strategic transaction that preserved value and ensured full recovery
The engagement ultimately supported a successful sale transaction and full loan recovery. If you are navigating a similar situation, contact MCA Financial to learn how we can help.