• Transport

    From a start-up business with just two trucks, two brothers have taken their transport business to a 77-truck concern, turning over nearly $19 million a year.

    The company believes adopting debtor finance was one of the best moves is has made.

    “Our first feeling was apprehension – are we doing the right thing? That was very quickly replaced with the feeling – why haven’t we been doing this for years,” the company’s director said.

    “Today we turn over about $19 million a year and have a good spread of clients including some very large customers such as Toll Group.”

    In 2004 the company started to expand rapidly and juggling cash flow was proving a nightmare. The firm employs 110 people, including outsourced labour hire. It had weekly outgoings of about $300,000, including payroll and fuel, but often had to wait 30 to 60 days for payment from customers. Funding this lag was strangling growth.

    It was through a chance meeting with their current provider that the company was introduced to the concept of debtor finance.

    “We were experiencing fairly strong growth at the time. We were basically getting extra work contracts come our way which meant we had to purchase additional equipment. It is very hard when you are being offered work to turn it down. There is always the possibility that you open the door for other contractors and that is really a door you do not want to open.

    “We saw the advantages of debtor finance in supporting our growth. Whether you are growing organically or through acquisitions, it is still an up-front expense. By bringing our cash flow forward, we were able to take on the additional work.”

    Transport as an industry lends itself to debtor finance in a number of ways.

    “The thing is, in the transport game, you always have freight that is time sensitive. Time-sensitive freight has to be carried by equipment that is reliable and unless you have the ability within your cash flow to keep turning over your equipment, it will fail and that places your contracts in jeopardy.

    “The acquisition of new equipment is not the main reason you use debtor finance. You have to be able to afford the new equipment straight away but you won’t receive income from the equipment straight away. Debtor finance allows you to grow your business without suffering that initial heartache.”

  • Mining

    aust_outback

    A WA-based crane hire company is one firm that has used debtor finance to cope with its need to expand and capitalise on the mining boom.

    When the business grew its operations 300% in 12-months it realised the need for a strong financial resource to cope.

    More demand for the company’s services meant more need for cranes – with resultant demand for capital expenditure and the potential to outstrip cash flow.

    The company turned to debtor finance as a user-friendly financial solution and in two years the business expanded with turnover increasing fivefold.

    “The use of debtor finance enabled us to carry through the turbulent period of extremely rapid growth without financial pain or risk until we reached stable turnover levels at a vastly higher plateau. This enabled us to expand and keep our financial feet firmly on the ground,” the company’s director said.

    The company started a decade ago with a single crane. It today services the WA goldfields with an extensive fleet of cranes.

     

     

  • Engineering

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  • Construction

    This page is currently being updated:  More information coming soon

  • Human Resources

    Flexible finance has been the key to success for a small Tasmanian specialist labour hire company.

    The firm has established a reputation as a valuable trouble shooting operation in the mining and energy sectors but rapid growth of the business put a strain on finances.

    “It’s quite confronting to go from a wage bill for four people to having to find the funds for more than forty,” the director said.

    “We need to pay our people as they work – either weekly or fortnightly, but we don’t invoice the client until the job is completed – and we get paid in line with normal trading terms, often 30 days end of month. That presents a real cash flow challenge for a small business.”

    The solution was provided through debt finance.

    “We were growing, quite rapidly, and we needed a financing option that guaranteed our cash flow and was flexible enough to grow with us.

    “We could have gone back to the bank and increased our overdraft but they would have wanted bricks and mortar security; in other words putting our property in the facility. It just isn’t flexible enough.”

    “From the outset it was obvious the debtor finance provider we went to wanted to learn about our business and work with us. They made the effort to understand the specialist nature of our services and the reasons behind our invoicing system, and then they designed a facility that worked perfectly for us.

    “In terms of future growth, the possibilities are pretty well limitless”.