A large allied health business providing care services to TAC, NDIA and NDIS recipients was struggling with their credit solutions that just weren’t working and didn’t reflect the size of their business.
With 200+ staff on the books and monthly turnover sometimes exceeding $1.5M, their problem stemmed from payroll to staff being made weekly while insurers and government departments paid them roughly monthly (sometimes late, which many business owners will relate to).
As a consequence, their cash flow needs were more like a labour hire business than a traditional health service.
With good management they’d made a couple of well timed unsecured loans work to support their cash flow but this was really a bandaid solution and not the support they needed.
We approached a lender with a background in invoice finance and worked with them to build a bespoke solution of a line of credit and a selective invoice finance facility, each with limits of $500k.
Selective invoice finance is where you nominate which invoices you want to raise finance against instead of factoring your entire accounts receivable.
It allows you to bring your cash recognition forward on the invoice value of your choosing.
The benefit of this facility over traditional invoice finance is the complete absence of fees – no service fees, no monthly fees and no line fees.
If our client doesn’t select an invoice to finance, they pay $0 for the facility.
If you’ve been in business for a while, you know $500k credit facilities of any kind with $0 fees are beyond rare.
Combine this with a $500k unsecured line of credit limit, which was used to payout expensive term loans and still leave head room in their limit, the cash flow solutions for this business now better reflect their size.
Managing payroll is going to be a whole lot easier and the business owners are rapped.
I’ll also add they were up there with the nicest people we’ve ever worked with and it’s an absolute pleasure to provide a great outcome to brilliant business owners.
