Capital to expand an existing business
| purpose | Working capital for business expansion |
| loan limit | $2,000,000 |
| lvr | Not required |
| loan term | On going |
| facility type | Mixed Trade Finance / Invoice Discounting Facility |
| interest rate | Variable |
The current funding provider was holding a fixed and floating charge plus real estate security in order to provide a working capital of $1,000,000. The lender was limited, unable to be increased and was inadequate given projected increase in turnover.
An alternative financing arrangement was set to provide a working capital facility of $2,000,000. The structure required a first ranking charge over the business, guarantees from related entities and Directors / Shareholders, but no real estate security.
Combining a Trader Finance facility with a receivables facility gave the business the opportunity to fund stock purchases prior to converting the sales into receivables. The effective cash flow benefit is 60 days, which removes all cash flow obstacles, and follows the full realization of their growth potential.
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