The Scenario
Established in 2004, this specialist group of companies provides cost-effective solutions to the traffic industry. They deliver these solutions to a range of customers, including road authorities, local councils and energy companies, both throughout Australia and a growing number of overseas countries. In 2019, the group took out a loan with an investment holding entity to repay facilities and restructure debt with their main banker.
The business sought working capital to help them settle the investment holding entity’s loan.
The Solution
The company’s financial adviser approached Octet to ask about a solution that would provide the additional working capital the group needed to pay out their loan.
Octet created a solution involving both Trade Finance and Debtor Finance to suit the business’s unique requirements. The group had sufficient assets business-wide to support a competitive $550k Trade Finance facility, which enabled them to refinance their loan. Going forward, the facility will help them to buy from overseas suppliers and improve their gross margins. Octet’s Debtor Finance facility virtually replaced more expensive offshore funding that had regressive covenants. The $5.55M funding has been capped by the offshore funder, but this is likely to change around Oct 2020 with an increase in Octet’s facilities, should the offshore funder consent.
The business is now well positioned to seek better prices from their suppliers, and fund future growth with new, diversified offerings.
Could your business benefit from a trade finance facility?
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