Case Study: How to use finance to aid growth in a wholesale business

Our case study client is a wholesaler of premium organic food supplies to a major distributor and had just won a contract to supply a major supermarket.

Operating for under 2 years, our case study client made contact with us last week to make an enquiry about what lending options might be available to help support their growth. Experiencing positive growth and sales activity, the client had managed to have their product stocked at a major bulk retailer. They were not yet profitable and had been receiving support from family to assist their cash flow needs as required but had now secured a contract with one of the major supermarkets. This new contract was an exciting achievement for our client but also came with the stress that they (or their family) would not have sufficient resources to cover costs to get their product into the supermarket at the volume required to take advantage of this new opportunity.

In addition to only trading for a short period of time, our client was not yet profitable.

Looking at the clients accounts receivable and having a contract in place there was a clear business case to support the cashflow for the food wholesaler. In speaking to a lender, they were able to see the client’s conservative forecast of future revenue was aligned to the new contract and it was clear their receivables would grow to a much higher level in the near future. 

Outcome: our recommended lender produced a letter of offer for our client for debtor finance facility with a limit of $500,000 within three hours of us raising the opportunity.

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