Case Study: Manufacturing

Client & Objective:
A long-established South Australian manufacturing business turning over circa $20m looking for increased working capital and asset finance facilities to capitalise on new contracts. Long term incumbent major bank had taken a significant amount of time to advise clients that they were not able to assist.

Requirement:
Additional working capital funding of $1m and asset finance of $2m to accommodate two new major contracts to be delivered over a 5-year period. Incoming financier to recognise existing equity that was held across plant and equipment, inventory, debtors and owner-occupied industrial property. A detailed understanding of key cash flow drivers for the existing business and new contracts was vital to sourcing an appropriate finance structure to facilitate immediate growth. Accountant played a key role in the funding application process through the preparation of detailed 3 way cash flow forecasts.

Solution:
HT Capital presented a detailed finance strategy which attributed value to alternative assets owned by the business being inventory, debtors and plant & equipment. This equity, along with a detailed understanding of the business cash flow drivers, enabled HT Capital to source funding offers from other major banks to accommodate immediate growth opportunities. The solution involved a full refinance and increase of the incumbent bank’s existing facilities which were no longer appropriate for the business.