Any business owner who has led their operation through a high growth phase knows the strain on cash flow this kind of strategy can cause.
A food manufacturer with a foothold in all major supermarkets our client was expanding into a new state to continue their exciting growth trajectory.
Due to the nature of their high quality products, manufacturing facilities need to be setup as regional hubs to support distribution in a localised way.
While this ensures a high quality product, this strategy also demands significant resources from working capital and places pressure on maintaining tax obligations, payroll and other operational expenses.
Expecting their major bank to assist, our client had been disappointed with their response before coming to us, as the bank had decided on a conservative approach and was not keen to provide funding until after the growth strategy had been completed.
This let-down left the business owner seeking urgent funding and their existing finance broker referred them to us after they were out of ideas.
Understanding the cash flow cycle of a manufacturing operation we knew where we could access funds fast with an unsecured business overdraft.
With an application placed on a Thursday we called on relationships at a senior level, gained a policy exception and approval for settlement and funding the next day.
That’s right – an unsecured business overdraft applied for, approved and funded in 24 hours.
Just in time to support a BAS payment to keep them compliant with their ATO payment plan.
The business was over the moon with what achieved and how fast we executed.
Cash flow sorted.
Why This $300k Unsecured Business Overdraft Was the Perfect Solution
The $300k unsecured business overdraft was more than just a temporary fix for our client’s immediate cash flow issues. It was a carefully tailored solution that addressed their unique needs and supported their need for working capital and cash flow.
Let’s break down why this loan was such a perfect fit and how it benefited the business beyond simply bridging the cash flow gap.
1. Flexibility Without Property Security On The Line
One of the most significant advantages of an unsecured business overdraft is that it doesn’t require the borrower to provide a mortgage over a property as collateral. For a business that’s in a rapid expansion phase like our client’s, this flexibility is crucial. They already had their working capital tied up in the new facilities and distribution hubs. Asking them to put up property or other assets would have not been a desirable solution and taken weeks to execute.
By opting for an unsecured solution, they could access funds quickly without tieing up property into a secured business loan. This provided peace of mind and allowed the business to maintain focus on growth rather than worrying about asset valuation or collateral commitments.
2. Speed of Approval and Settlement
With BAS payment deadlines looming and payroll to make, time was essential for our client. The speed at which we were able to get this overdraft approved and settled was critical for keeping the business on track. By leveraging our industry contacts and pushing for a policy exception, we were able to get the loan approved in just 24 hours—an almost unheard-of turnaround time, particularly for unsecured financing.
This speed was instrumental in ensuring that the business remained compliant with its tax obligations, avoiding any potential penalties or disruptions from the ATO. More importantly, it allowed the business to continue operating smoothly without the pressure of missed payments or operational hiccups that can often arise during rapid expansion phases.
3. Ongoing Access to Cash Flow
An overdraft differs from a traditional loan in that it provides an ongoing credit facility. This means the business didn’t just receive a lump sum of money—they now have continuous access to funds as needed, up to their $300k limit. For a manufacturing business dealing with fluctuating demand, variable expenses, and the complexities of supply chain management, the flexibility of a revolving business line of credit is invaluable.
The client can draw down the overdraft when needed, and only pay interest on the amount they actually use. This allows for optimal cash flow management, giving them the power to address unexpected expenses, manage payroll, or purchase additional materials as their business needs dictate.
4. No Early Repayment Penalties
Another key feature of the unsecured overdraft is that it offers the business freedom to repay the borrowed amount without incurring any early repayment fees. This feature aligns perfectly with a high-growth business model where revenue cycles can be unpredictable.
As the business starts generating more revenue from their new market and expands its presence, they’ll be able to repay the overdraft without any financial penalties, providing maximum flexibility. In other words, they won’t be locked into a rigid repayment schedule, allowing them to allocate funds as necessary for future growth opportunities.
5. Strengthening the Business for Future Lending Opportunities
Securing this $300k overdraft not only provided immediate relief but also strengthened the business’s financial standing. By maintaining cash flow, adhering to their ATO payment plan, and continuing with their growth strategy, the business is positioning itself for future success.
Does Your Business Need An Unsecured Business Overdraft?
In this case, the $300k unsecured overdraft wasn’t just a quick financial fix—it was a carefully structured solution that supported both the immediate and long-term goals of the business. It allowed our client to maintain cash flow, continue with their ambitious growth strategy, and stay compliant with the ATO, all without the burden of property security or being tied down by rigid repayment terms.
Does your business need an unsecured business overdraft? Talk to an expert.
