Retiring $240K in Annual Debt Service Without Refinancing

The Situation

An event-driven services company with about $5M in revenue was carrying short-term debt that debited $950 every business day, about $240,000 a year. That was 4.8% of revenue leaving the business before any operating decision got made. The structure is common in event-driven businesses: costs come weeks before an event, billing follows the event, and payment follows billing. The gap gets bridged with whatever capital is fastest, not whatever is cheapest.

What We Did

We built a budget and held the business to it.

The Result

• The debt was retired about 18 months early, out of operating cash
• No refinancing and no replacement facility
• The full daily payment returned to the business

Why It Matters

Most owners in that position look for cheaper debt. Paying it off from operations solved the cash timing problem instead of repricing it, and left nothing to renew and nothing to personally guarantee.