The Scenario
This specialist offering labour hire to the engineering and trades sector has been operating in Perth for over 10 years. The business had a $1.25M debtor finance facility in place with their bank, however, given recent growth and a pipeline of opportunities, they sought to increase their debtor finance facility line to $2M.
The director also had his private banking from the same bank with multiple investment properties. When the business sought to increase their debtor finance line, the bank in question advised that in order to do so the director would need to undertake new valuations on all his properties. This would take considerable time and cost. Uncertainty in the property sector in recent years also made this an unfavorable path to take.
The Solution
The managing director of the business approached their finance broker, who referred them to Octet Finance, knowing we had handled many refinances of a similar nature.
Octet was able to approve a competitively priced $2M Debtor Finance line, meeting the business growth needs. During Octet’s assessment, the clients advance rate on invoices was also increased from 80% to 85%. This meant not only was the client receiving a larger facility limit, but would also receive a greater level of funding over what they were receiving from the bank each week.
Upon settlement refinance of the banks exposure, Octet had a surplus of funds available for the business, which placed them in a stronger cash position from Day 1. The business is now in a prime position to fund existing and future growth opportunities, while keeping the personal property portfolio separate from the business funding. A great outcome for the business owner in diversifying their loan portfolio, having obtained additional funding at competitive rates while securing the business’ future.
