Case Study: $1.3M For a Labour Hire Partner Buyout

Breaking up doesn’t have to always be hard.

It’s not uncommon for larger labour hire firms to be run by 2 or 3 key individuals who originally came together combining skill sets, networks and expertise to share and build something bigger than they might not have achieved on their own.

While many groups can stay together productively for extended periods, like all partnerships, a member can become interested in other business opportunities or retire or change direction for some other reason triggering the need for a buyout.

So it was for our client.

While running a successful operation, both remaining directors were still very much building assets outside of the business meaning they needed an unsecured solution.

Having a history of profit and consistent strong growth they approached their existing business bank but after 6 months of half promises they were no closer to an outcome and the potential for the exiting partner to become increasingly impatient continued to build.

At this point one of the directors approached us.

Not expecting to be able to achieve much they asked if we thought we could raise just a portion of the funds required to pay out their exiting partner.

Assessing their business and their financials it quickly became apparent the issue wasn’t their business.

It was their bank.

The major commercial banks often have marked differences in credit appetite.

It’s not that any of them are bad, more so their credit appetite is usually hot for different kinds of business and maybe different kinds of loans and not for others.

No bank is the best solution for all scenarios.

But we knew which bank would love to support this labour hire business.

Within days we secured an indicative term sheet not only for the full $1.3M required for the partner buyout but also a $100k unsecured overdraft and a $200k equipment line without any property security.

It was an outcome that left the remaining directors very happy.