In an industry where care is paramount, ensuring financial sustainability can often be a delicate balancing act. For an Australian homecare services company, this balancing act became increasingly challenging as the business expanded across the country. Despite a mission-driven approach to revolutionise in-home care, the company faced significant financial hurdles, particularly in managing cash flow. With the help of Octet Finance, this company was able to stabilise its operations and continue its vital work, demonstrating the critical role of working capital finance in supporting businesses in the health and aged care sectors.
Establishing the business and planning for growth
The company was established in 2016 with a vision to transform the homecare industry. Offering a broad range of in-home services — including personal care, companionship, assistive technologies, pet care, and transportation — the company aimed to help its members maintain their independence and quality of life. One of the company’s most innovative features is its technology-driven approach, which empowers members to monitor their health, track care schedules, and manage their expenditures.
However, as the business expanded rapidly across Australia into most major cities, it faced significant financial pressures. Despite a 50% increase in revenue from 2022 to 2023, the company had incurred losses for four consecutive years, reflecting the intense cash flow challenges typical in the aged care sector. Operating on a model where independent contracted carers set their own rates within suggested guidelines, the business found it difficult to balance affordability for members with fair compensation for the carers.
With the services increasing to over 35,000 in-home care activities per month – ranging from physiotherapy and nursing to lawn mowing and shopping services – one of the biggest challenges was cash flow management. The company needed to meet weekly operational expenses, but the monthly payments from the Federal Government’s Home Care Package Program created a significant cash flow gap.
Accessing working capital to ease cash flow pressures
Recognising that traditional lending solutions might not address these specific needs, the company’s commercial banking partner suggested exploring working capital finance options, particularly receivables financing, to bridge this gap.
Through the banker’s recommendation, the home care services company was introduced to Octet Finance’s Queensland Director of Working Capital Solutions, Allan Howe.
Understanding the business’s unique challenges and growth potential, Allan structured a $5 million debtor finance facility. Debtor finance, also known as invoice finance, allowed the company to unlock the value of its unpaid invoices, turning these future receivables into immediate cash. This was crucial for a business that operated on tight margins and relied on regular, timely payments to meet its obligations. With the influx of working capital, the company could cover weekly operational costs, including payments to carers and other essential expenses such as technology upkeep, marketing efforts, and administrative overheads.
“This solution provided the liquidity needed to manage weekly operational costs while waiting for the monthly government payments,” said Allan. “By smoothing out these cash flow fluctuations, the company could avoid the stress of having to defer payments to suppliers or delay critical investments in its growth.”
The impact of this working capital finance solution was immediate. With access to the necessary funds, the company could continue to pay the carers on time, maintain service quality, and support its ongoing growth. The financial flexibility provided by Octet’s facility meant that the business could focus on delivering high-quality care to its members without the constant strain of cash flow concerns.
Achieving the balance between financial stability and sustained growth
The partnership with Octet proved to be a turning point for the homecare services company.
“The stability provided by the debtor finance facility not only alleviated cash flow pressures but also allowed the business to sustain its growth across multiple regions,” explained Allan.
The availability of immediate funds allowed the business to confidently enter new markets, secure in the knowledge that it had the financial backing to support its growth initiatives. This included onboarding more carers, investing in advanced care technologies, and enhancing marketing efforts to attract new members.
The ability to consistently pay carers on time was particularly significant. In an industry where trust and reliability are paramount, ensuring that these independent contractors were compensated promptly helped maintain strong relationships and a high standard of care for members. This reliability, supported by the working capital facility, became a competitive advantage, allowing the company to attract and retain top-tier carers, further enhancing the quality of services provided.
The collaboration between the banker, Octet, and the homecare services company demonstrates how the right working capital finance solution can empower businesses to navigate financial challenges, sustain growth, and continue their mission-driven work. For this Australian homecare services company, Octet provided not just a financial solution, but a lifeline that enabled them to focus on what they do best — caring for their members.
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Via our Referral Partner Program, Octet empowers businesses across a range of industries, including healthcare, labour hire and transport, offering innovative Debtor Finance and Trade Finance working capital solutions.
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Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.
