Case Study

A well-established manufacturing business in Victoria approached us at Working Capital Finance Brokers seeking a funding solution to upgrade their factory equipment. The total cost of the equipment was $700,000, and the upgrade was critical to their business's growth and competitiveness.

At the time, the business was generating approximately $15 million in annual revenue and had ambitious plans for expansion. However, their outdated equipment was holding them back in several key areas:

• Increasing Operating Costs: The ageing equipment required frequent maintenance and consumed more energy, increasing operating expenses.
• Not Meeting Orders On Time: Limited production capacity and slower processing times were affecting their ability to fulfil growing customer demand.
• Preventing Growth: The outdated machinery was a bottleneck, preventing them from scaling operations to support their expansion goals and take on larger contracts.

Upgrading to more modern, efficient equipment would enable the business to streamline production, improve reliability, and position themselves as a stronger competitor in their market.

The Challenges:

Despite their established trading history and significant revenue, the business faced several challenges in securing funding:

1. No Longer Property-Backed: The directors had recently sold their property, removing the possibility of using it as collateral for the loan.
2. Existing Tax Debt: The business was managing a tax debt exceeding $1 million, which was being repaid through a payment plan with the ATO.
3. Specialised Equipment: The equipment they needed was highly specialised, requiring a tailored funding approach.
4. Maxed-Out Low Doc Lending: With existing equipment and vehicle finance in place, they had exhausted options for low documentation loans, necessitating a     full documentation approach.

These factors made finding a funding solution on conventional terms challenging. Their existing broker had advised them that they were not eligible for finance.

Our Solution:

After a thorough assessment of their financial profile and goals, we recommended pursuing Full Documentation Asset Finance as the best option. The business had:

• Comprehensive financial records, including finalised financial statements and BAS lodgements.
• A strong trading history that demonstrated robust performance despite the tax debt.
• An accountant who was actively involved in managing their finances and ATO obligations.

We collaborated with their accountant over the course of a week to compile the required documentation, including financial statements, BAS and bank statements, a debt commitment schedule, and a copy of their ATO payment plan. This allowed us to present a complete and compelling case to our lending network.

Outcome:

With all documentation in order, we submitted the loan application to a specialised lender with experience in funding high-value and specialised equipment. The application was approved within just a few days, providing the business with the $700,000 they needed to upgrade their factory equipment.

The timely approval enabled the business to move forward with their expansion plans without delay. The new equipment immediately delivered several key benefits:

• Lower Operating Costs: The modern machinery reduced energy consumption and maintenance requirements, improving overall cost efficiency.
• Increased Production Capacity: The upgraded equipment allowed the business to meet customer orders faster and take on additional contracts, supporting     their growth ambitions.
• Improved Product Quality: The advanced technology enabled more precise manufacturing, enhancing the quality of their output and strengthening customer satisfaction.

By helping them secure this funding, we positioned the business for sustainable growth and greater profitability, ensuring they could remain competitive in the evolving manufacturing landscape.

Key Takeaways:

This case illustrates the power of Full Documentation Asset Finance in overcoming complex financial challenges. Despite hurdles like tax debt and the lack of property backing, we successfully secured the funding they needed by leveraging their strong trading and track record.

If you’re facing challenges securing funding for your business, we’re here to help.

With access to Australia’s top lenders and extensive experience in structuring complex deals, we can tailor a funding solution to meet your unique needs.

Let us help you unlock the funding you need to take your business to the next level. Book in a call with us today!