client background

A civil contracting business on the border of NSW and Victoria found itself with a cash flow gap due to expansion and various pandemic issues. The client had a long track record of success and delivering outcomes for various enterprise and government projects. Due to continued and forecast growth, the group was looking to upsize existing facilities whilst managing the cyclical cash flow nature of its business.

client challenge

Profit figures over the past 24 months were significantly lower compared to previous years, predominately due to the impacts of Covid-19. Lockdowns had impacted interstate crews, supply chain issues increasing raw material costs, and NSW weather events including flooding were all contributing factors. As a result, ATO liability had increased and traditional major bank funding options were not available. The quantum of funds required was also significantly higher than turnover would indicate, based on the business heading to high season.

moneytech's solution

A well-respected debt advisory firm identified the need to consolidate the company's funding and engaged with Moneytech to provide a complete working capital solution. Our solution encompassed four components; a $4.0m Invoice Finance Facility to pay out the incumbent at a lower cost of funds; a $2.0m Trade Finance Facility to provide additional liquidity for upcoming works; a $1.4m Term Loan Facility to payout first mortgagee; and, $1.0m Equipment Finance Facility for additional asset purchases. Since settlement, the client has continued to grow sales with underlying profit margins returning to pre-pandemic "normal".