Case Study: eCommerce

Client & Objective:
A South Australian based ecommerce business turning over circa $3.5m had utilised online cash flow financing to grow rapidly over the past 4 years. Whilst this type of funding had allowed for consistent business growth, the short repayment terms were placing pressure on available business cash flow. HT Capital was approached by client’s accountant to facilitate a more sustainable and longer-term funding structure.

Requirement:
Consolidate several short-term funders totalling $1m onto a structured longer-term facility to alleviate cash flow burden. Provide more flexible working capital facility to assist with trade cycle without the need for structured principal and interest repayments reflecting strength of client’s balance sheet as well as personal asset position.

Solution:
Finance structure was negotiated with a major bank to allow for a full refinance of short-term loan facilities onto a 15-year principle and interest facility. This longer-term structure resulted in a cash flow saving of circa $60k per month. Finance structure also incorporated at $400k standard major bank overdraft facility (interest only and fully fluctuating) to fund the business trade cycle and required inventory position. Client was also provided access to a foreign exchange business to assist with managing the ongoing risk of currency exposures.