Case Study — Interim CFO

Rebuilding Lender Confidence After a Sudden CFO Departure

When a covenant dispute collided with an unexpected CFO resignation, Traverse deployed an interim CFO within four days to build a 13-week cash flow model, stabilize cash, rebuild the bank's trust, and give the board a credible path forward.

Industry
Industrial Manufacturing
Revenue
~$70M
Engagement
Interim CFO
Situation
CFO Departure & Covenant Breach

Companies facing a sudden leadership gap or a distressed situation often need senior finance help faster than a full-time search allows. This is exactly the kind of gap a Traverse interim CFO is built to fill — deployed in days, not months.

The Challenge

A Leadership Gap Opened at the Worst Possible Moment

The company's CFO resigned in the middle of a covenant dispute with its senior lender, leaving the CEO and controller to manage a banking relationship and a board that had both lost confidence in the numbers.

01

No One Owned the Cash Position

Payroll, vendor payments, and the borrowing base calculation were being tracked in three different spreadsheets by three different people. Nobody in the building could say with confidence what the company's actual cash position would look like in two weeks, let alone thirteen.

02

The Bank Had Lost Confidence

A covenant breach had gone unaddressed for several weeks before the CFO's departure. Without a clear recovery plan or a credible voice managing the relationship, the lender was preparing to tighten reporting requirements and reconsider the facility.

03

The Board Had No Reliable Financials

Monthly close was running more than six weeks behind. Board members were making decisions on stale numbers, and the uncertainty was starting to erode trust in leadership at exactly the moment the company needed it most.

The Traverse Approach

Stabilize First, Rebuild Trust Second

Traverse placed an interim CFO on-site within four business days of the initial call — fast enough to be in the room for the next scheduled lender update rather than reacting to it after the fact. The mandate was narrow and clear: establish an honest financial picture, then use it to reset the conversation with the bank and the board.

  1. Week 1 — Establish the truth. Built a detailed 13-week cash flow model from the ground up, reconciling AP aging, payroll obligations, and the borrowing base into a single, defensible source of truth updated daily.
  2. Weeks 2–3 — Reset the lender relationship. Went directly to the bank with the new cash flow model and a documented recovery plan, replacing a credibility gap with a specific, monitored path back to covenant compliance.
  3. Weeks 3–6 — Rebuild the close. Compressed a six-week close backlog down to a repeatable four-day process, and stood up a board reporting package the directors could actually rely on.
  4. Ongoing — Hand off a system, not a hero. Documented the new cash and reporting cadence so the finance team could sustain it after the engagement, rather than depending on the interim CFO indefinitely.

From Credibility Gap to Covenant Waiver

Within three weeks, the company had gone from an undisclosed covenant breach to a signed waiver — backed by financials the bank and board both trusted.

Cash Visibility
Daily

A 13-week rolling cash flow model replaced three disconnected spreadsheets, updated every day rather than reconstructed in a crisis.

Covenant Waiver
18 Days

From engagement start to a signed waiver, backed by a credible recovery plan the lender could underwrite.

Monthly Close
4 Days

Compressed from a six-week backlog into a repeatable close process the internal team could sustain.

Credit Facility
Retained

The lender relationship was restored and the existing facility preserved on improved reporting terms.

We didn't just need someone to read a P&L. We needed someone the bank would believe. Traverse gave us that credibility in days, not months — and left us with a cash process we still use today.

Chief Executive Officer PE-Backed Industrial Manufacturer

About Cash Flow Modeling and Covenant Breaches

What is a 13-week cash flow model?

A 13-week cash flow model is a rolling, weekly forecast of cash inflows and outflows — payroll, accounts payable, receivables, debt service, and borrowing base availability — used to give lenders, boards, and management a near-term, granular view of liquidity. It's the standard tool CFOs use to manage cash through a covenant issue, turnaround, or other period of financial stress, because monthly financials are too infrequent to catch a cash shortfall in time.

What happens when a company breaches a loan covenant?

A covenant breach gives the lender the right to take action — from requiring a formal waiver and additional reporting, to repricing the facility, to accelerating repayment in severe cases. In practice, most lenders will work with a borrower who brings a credible recovery plan and reliable financials quickly. The risk isn't the breach itself so much as a lender that has lost confidence in the numbers behind it.

See How Traverse Handles Other Situations

This case study is an anonymized composite drawn from representative Traverse engagements. Client identity, exact figures, and identifying details have been adjusted to protect confidentiality.

Facing a Leadership Gap or Lender Pressure of Your Own?

Traverse deploys interim CFOs within days to stabilize cash, restore stakeholder confidence, and give leadership room to think clearly again.

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