Cobbetts has negotiated loan facilities of £10.5m in an effort to avoid a partner cash call

The firm renegotiated a bank loan facility with RBS in Janaury, which comprises a £2.5m overdraft and a £6.5m term loan secured by a debenture over the assets of debt recovery business Incasso – a wholly-owned subsidiary of Cobbetts.

The firm also borrowed £1.5m through a short-term asset-based leasing arrangement in order to pay January's tax bill and avoid carrying out a cash call.

Cobbetts managing partner Michael Shaw (pictured) said: "The debenture was granted by the discrete debt recovery business, Incasso, by way of security for the facility. It was not considered appropriate for the debenture to be taken over Cobbetts in view of the modest level of the funding."

He added: "By increasing borrowings in this way, we have avoided calling on partners to increase the capital within the business, and are on course to reduce borrowings significantly in the 2009-10 accounting period."

The firm's recently-filed limited liability partnership (LLP) filings also reveal that the firm's highest-paid member took home £257,000 in 2008-09, a 35% reduction on the figure of £394,000 in 2007-08. Total profit, before members' remuneration, was £9.4m – 44% down on the previous year's figure of £16.9m.

Profit-sharing arrangements were varied by reducing the fixed element of each partner's remuneration.

The firm's net debt increased by 60% over the year to £11.5m, while total cash at the bank and cash in hand decreased by 87% to £78,000, according to the filings with Companies House.

Staff numbers fell by 53 to 588 over the year, resulting in a 14.4% reduction in staff costs to £20.9m.