Dear clients, colleagues, and partners,
In 2015, after three years of hard work, Newpoint continues to communicate our fixed fee message. The turnaround industry paradigm has been stagnant for years, with most providers utilizing an hourly billing model that’s financially out of reach for most small to lower-middle market business. Further, engagements last for months, costs are unpredictable, and transparency is lacking. We believe we have a better solution.
Our team’s decades of experience led us to develop a structured, process-oriented model that’s affordable to businesses specifically with revenues of $1-50MM and credits of less than $10MM. We are a completely different solution from the “old” model and 2015 brought a lot of energy and excitement from those who agreed. As our message continues to spread, our company continues to grow. Since our inception just three short years ago, we have recovered $132MM in debt, saved 2,299 jobs, and grown to 15 employees.
Highlights from 2015 include:
- Oil & gas – In December, we completed an engagement with CNG, a natural gas company who was struggling due to market issues rather than internal issues. Read more
- MCAs – In September, we exposed the rise of Merchant Cash Advances (MCAs) and the negative impact they’re having on small business and their lenders, and our economy. Read more
- TMA SBA Webinar – In December, our president, Ken Yager, moderated a 3-person panel with TMA Global on how SBA loan workouts differ from Conventional C&I Loans. Read more
- Only one client liquidation. All other clients were turned around or recapitalized.
Our focus in 2016 is on:
- The rapid expansion of MCAs – as the traditional source of funds for small and lower-middle market businesses continues to be restricted, supply and demand will continue to dictate they find capital somewhere, but with dangerous consequences.
- Healthcare – Due to higher administrative cost and lower reimbursements, small providers continue to be pushed out of service. With stretched cash conversion cycles and limited access to capital sources, companies with around 30 professionals or less are experiencing difficulty maintaining their business model. This number will continue to rise.
- Manufacturing – If you are working on industrial products not involved in automotive or housing, you are likely to have lost revenue and will see more top line issues in 2016.
- Retail – The channel is shifting in two ways. It is clear that etailers are gaining ground on traditional brink and mortar retailers. However, also note that the bohemian days of internet start-ups in retail are winding down. Merely selling a product on the internet is not good enough. You have to be cost effective which requires scale. This will continue to lead to domination of sites like Amazon and Alibaba unless you truly sell unique product.
- Distressed assets – Investor interest in distressed assets remains strong despite the current market offering few distressed assets. With multiples at or near cyclical highs, investors are forcing closings with the assumption that assets will appreciate. It can happen, but there is not enough inflation or consumer growth to justify bidding so close to par.
- Changing bankruptcy laws – The American Bankruptcy Institute Commission to Study the Reform of Chapter 11 suggests the current bankruptcy system is “cost-prohibitive and ineffective for many companies, particularly in the small and middle-market space.” (Source.) Newpoint has begun to work with a member of the commission to lend our expertise and opinions in crafting a solution. We welcome your input in this critical conversation.
- Continued expansion of our products and services – in early 2016 we officially expanded to the Charlotte market.
- Cash Flow LauncherTM – Interest continues to grow for Cash Flow Launcher our straightforward cash forecast model, that helps companies that need monitoring rather than crisis management.
We appreciate your contributions in our success this past year and are looking forward to continued growth in 2016. If you would like to discuss how Newpoint can help you or your clients, or know someone who might be interested in our services, we’d love to talk. Together, we can recover capital, save jobs, and strengthen our economy.