Cash Flow Lending for a New Agribusiness

Our case study client is a major supplier of agricultural product distributed throughout Australia. Operating a business on tight margins and an overseas parent company wishing them to source their own local finance, they needed an evergreen line of credit with a limit large enough to support their volume of trade at a rate low enough to maintain profitability. Their circumstances were complicated in that they had been trading for barely a year and weren’t yet profitable. 

The client had previously made enquiries into debtor finance. Lenders looked poorly at their lack of profitability and that they had been trading for just over a year. Credit limits they had been offered were much too small to support their business model and at rates that would have stripped any chance of profitability and made their business unviable.

We knew which lenders would support large enough credit limits that this client required. Talking through the deal with our key contacts we were able to get them to see where the business was going with appropriate lending support and work to a detailed forecast of revenue vs the limited financial data that was available. 

Outcome: Two offers procured in 48 hours. One with a $7M limit and another with a $10M limit. Both with pricing that supported the client’s business model.