April 20, 2021 11:14 AM

Partnership Buyout & Debt Restructure via Asset Based Lending Solution

Alternative lenders play a substantial role when clients are seeking non-traditional solutions. So when Moneytech was asked how a company could affect both a partnership buyout and a restructure of its current debt facilities we knew that answer was not as difficult as the client imagined...

We provided a unique $1.65m funding solution to a transport company who provides logistics services to metropolitan and regional Victorian businesses for general freight.

The business had reached a transitional point with the Directors mutually deciding to part ways with the motivated and technical Director taking over the reins to continue growth. The settlement provided financial benefit to the exiting partner whilst also restructuring debt obligations.

Asset Based Lending was structured to not only effect the partnership buyout but also to restructure existing debt facilities and provide a sustainable amortisation at increased debt levels. Working capital lines were a necessity to ensure that cash flow was available for the business moving forward:

Funding structure provided at settlement:

  • Equipment Finance unlocking equity in existing fleet whilst also restructuring the amortisation basis to ensure that sustainable debt reduction is appropriate for the business on a long term basis
  • Invoice Finance (advancing at 95% of Invoice values) to fund against the current receivable book. This allowed additional funding to be unlocked for multiple purposes – allocate funds to payout partner and provide working capital access for both current and future requirements
  • Term Debt against property to ensure that undue pressure or over reliance was not placed on the working capital facility

The addition of the Term Loan had multiple purposes – reducing reliance on the Invoice Finance Facility to partially raise capital to payout the exiting director. This then ensured that sufficient access to working capital lines were available for the short and medium term purposes.

Providing additional security also meant that the business could return to Moneytech for additional access to capital for growth and acquisition endeavours.

To find out more about how our Asset Based Finance could help your business check out our Finance product page,  talk to your BDM or broker.

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