Australian Invoice Finance (AIF) recently financed a western Sydney manufacturing business that bottles spring water.
This family business had been operating successfully for 15 years.
The business was funded by an old-style factoring facility, a short-term fin-tech loan facility as well as finance from the main bank lender on a term loan.
The owners too took out these facilities during periods of prosperity, with the intent to repay them in due course.
However, through no fault of their own, the owners lost a major customer which represented 40% of their annual turnover.
With some fixed overheads and finance repayment commitments, the reduction in turnover and money through the bank account or cash flow caused the client some financial distress with creditors and lenders. The directors had put up their family home as security to secure credit, so they were determined to make a success of the business.
Unfortunately, due to the reduced cash flow, the client was in arrears with some lenders who had taken action against the business.
None of the existing lenders could provide further support including the old-style factoring or invoice finance company. The directors needed a flexible, innovative and resolvent invoice finance company to help it move forward.
The owners made contact with Australian Invoice Finance through a finance broker. The approval process was quick and simple with 85% of outstanding invoices being funded. Having various lenders on the Personal Properties Security Register (PPSR) complicated the process of refinance a little. But, through negotiation and payment of arrears, all other lenders were willing to allow a change of invoice finance to Australian Invoice Finance.
It’s fantastic for AIF to have a new manufacturing client with a cash flow facility that improves its potential for growth, restores confidence within the business and is paying creditors in a timely manner.
Now that its domestic manufacturing operations are funded, the business can now look to expand overseas where demand for Australian spring water products is high. The owners expect to double the size of the business in the next 12 to 18 months if international contracts can be secured.
AIF is now assisting the client to find a trade finance facility to continue the sales growth strategy of the directors.
Another Done Deal!