Business Lending - Case Studies

Case Study 1: Cashflow Lend / Balance Sheet Lend

Scenario

Strong retail business within the region and has been operating for over 20 years in the retail industry

They needed some extra cash as they had been exposed to a situation where some of their debtors were late in payments which created a cash shortfall.

They have the ability to bulk buy stock at a discounted price meaning higher returns once the stock is sold to their extensive customer base.

Solution

We were able to put our application with a lender who accepted the circumstances of the business and were happy to support them.

The strength of the balance sheet, the business having a strong list of debtors along with strong tangible assets allowed us to borrow against this to support the business in their need for extra shorter-term cash. This was in the range of $2 million dollars.

Outcome

Once we had the finance approved, it allowed the business to keep supporting itself, whilst taking advantage of a bulk stock order. This really propelled the business into success and a growth period along with allowing them to continue to meet their obligations such as wages during a time where they were struggling with cash

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Case Study 2: New Business Purchase

Scenario

Husband and Wife with two young children wanted to open a new clothing store. They required $850,000 for stock purchase, fit out, etc.

The challenge here was the fact that the wife was going to quit working and she was going to run the new business, the husband was going to remain at work, therefore they only had the one income at the moment.

Solution

They had an existing mortgage of $600,000 on their family home which was worth $1.2 million. 

We found a bank who were happy with the available equity in their home to use as security for the business loan.

The bank also allowed the use of cashflow forecasts to service both the business loan and the home loan. The cashflow forecasts were compared to industry averages and able to service both loans comfortably along with the husbands full time wage being able to support the home loan also.

The wife had a strong background of management in the industry which aided in the success of the application. We helped prepare the paperwork to prove to the lender that they were a good candidate.

Outcome

We were able to find the best solution for the clients and they are now operating a really strong retail business along with them having the freedom of running their own business also and realising their dreams.