Client Background

​

Industry: Renewable Energy / Construction
Company Size: Mid-to-Large Contractor (50+ employees, multi-state operations)
Annual Revenue: $25–40 million
Headquarters: Eastern United States

 

Overview

The client is a leading regional solar energy design and installation contractor specializing in large-scale commercial, agricultural, and residential solar projects. Over the past decade, the company has built a strong reputation for engineering excellence, sustainable practices, and turnkey project delivery — from concept and design to permitting, construction, and maintenance.

 

The business has experienced consistent revenue growth driven by the rising demand for renewable energy solutions and government incentives for clean energy adoption. However, operational inefficiencies and recent financial pressures have begun to erode profitability and liquidity.  As a result, management accepted several large and expensive MCAs (Merchant Cash Advance) as they felt they couldn't wait for traditional funding.

 

Operational & Financial Challenges

 

1. Overpayment for Key Operational Services

Despite its size and market strength, the company is significantly overpaying for several essential service categories, including:

• Insurance: Commercial liability, vehicle fleet, and workers’ compensation policies are managed through a legacy broker relationship that has not been competitively bid or reviewed in over five years. Premiums are estimated to be 20–30% above market.

• Engineering Services: The company outsources specialized structural and electrical engineering tasks to multiple vendors at inconsistent rates, with limited standardization or volume-based pricing.

• IT, Internet, and Software: The firm maintains redundant software subscriptions and internet services across multiple offices, along with overstaffed third-party IT support, resulting in duplicated costs and inefficiency.

 

2. Cash Flow Crunch and Liquidity Strain

During the past fiscal year, a major commercial client filed for bankruptcy protection, creating a short-term but severe cash flow gap. To bridge the liquidity shortfall, management accepted several high-cost Merchant Cash Advances (MCAs).

 

While these advances provided immediate relief, the daily repayment structures and extreme effective interest rates (in excess of 35–50% APR) have since constricted operating cash flow, limited purchasing power, and created additional financial pressure on the company’s credit position.

 

Impact

• Eroding Margins: Rising overhead and financial costs have reduced gross margins by nearly 8%.

• Vendor Fatigue: Key suppliers are demanding accelerated payments due to inconsistent cash flow.

• Growth Stagnation: New project bids are being delayed or downsized due to working capital constraints.

• Credit Tightening: Existing lenders are hesitant to extend additional credit due to the presence of multiple MCA obligations.

 

Consulting Opportunity

 

The situation presented significant potential for immediate and measurable results through:

• Vendor Cost Audits & Renegotiation: Identified and implemented 15–30% cost reductions across insurance, engineering, IT, and telecom services.

• Financial Restructuring & MCA Negotiation: Reduced and restructured high-cost merchant cash advance obligations to restore liquidity.

• Process Optimization: Introduced standardized procurement and cost-control systems to sustain long-term savings.

• Cash Flow Stabilization: Improved forecasting and reserve management to prevent future disruptions tied to project payment delays.

 

Outcome Goal

Restored profitability and financial stability within 90–120 days through a combination of cost reduction, debt restructuring, and process reengineering, allowing the client to resume growth-focused operations in the rapidly expanding solar energy sector.

​

In conclusion, with it's newly restructured operating procedures and standardized protocols, the company has caught the eye of a large Renewable Energy Services contractor based in Greece.  The company is seeking to expand it's global footprint, and is currently in negotiations with our client for a full buyout, providing the owner and management with an extremely profitable exit plan.  In fact when the deal goes through, the owner and management will be multi-millionaires as a result of the sale.