A large North Island based traffic management company needed additional funding to assist with the restructure of other businesses within their group. They were looking to release equity tied up in their balance sheet.
The broader restructure of the group was going to take some time, during which time they needed additional cash flow. The group’s existing funders declined to assist. They did not want to increase their exposure to the group at all.
This is an example of a business that is asset rich, with customers stretching their cash flow thin. We were asked to help find a working capital solution that would unlock equity in their balance sheet, and provide additional cash flow - without impacting their current financing arrangements. The directors were also keen to minimise personal guarantees and liabilities.
As a team, we determined that the business would be able to raise funds against their fixed assets through an alternative fixed asset lender using the company’s assets - trucks.
Working collaboratively with the fixed asset funder, we co-designed a cash flow invoice financing facility that gave the finance department confidence to execute the restructure.The solution did not apply onerous lending conditions against the business.
In fact, it gave them a much larger, scalable working capital facility with Lock Finance than their existing provider.For the shareholders, this meant more breathing space and access to funds to implement their restructure plan.The company has retained their invoice financing facility as they’ve seen the immense value in unlocking cash tied up in unpaid invoices early.