Summary
After years of profitability, a labour hire firm was caught in the long tail of the COVID downturn. As key client sectors collapsed, revenue declined, and their bank, once a steady partner, refused to lend further without additional personal guarantees. Lock Finance offered an alternative: a scalable, receivables-backed facility that gave the business the time and flexibility it needed to recover and reposition.
The firm, a specialist labour hire provider, had built a solid niche supplying temporary workers to two core industries. The model was straightforward: respond quickly to seasonal and project-based spikes in demand with skilled temps. For several years, the model worked and returned consistent profits.
But the COVID lockdown era reshaped everything. The client sectors most dependent on flexible labour were also among the most exposed to shutdowns. As demand collapsed, the business faced a prolonged period of reduced revenues and underutilisation.
In the eyes of their bank, the narrative changed from resilience to risk. Despite a long and profitable trading history, the bank insisted on further security, specifically tying new funding to the remaining equity in the directors’ home. The business declined. The relationship ended.
Like many SME operators, the firm’s directors had already begun adapting, pivoting away from hard-hit sectors and cultivating new client segments. But pivots take time. And time, in business, must be funded.
To maintain payroll, meet tax obligations, and manage uneven receivables, the company required working capital that adjusted to the rhythm of their billing, not the rigidity of property-backed credit.
Lock Finance reviewed the ledger, not the balance sheet. They recognised a viable operating model with experienced leadership and a steady stream of receivables.
The company was approved for a flexible Invoice Finance Facility secured solely against unpaid invoices. The facility would scale as the business scaled, requiring no property security and no long-term fixed debt.
The underlying assumption was not that the business needed rescuing, but that it deserved the room to recover.
With the new facility in place:
“We didn’t need a lifeline. We needed a bit of belief and working capital that moved when we did.” — Director
In the wake of external shocks, many well-run businesses find themselves misaligned with traditional credit models. Banks, focused on asset cover, often exit just as firms begin to reposition.
Invoice Finance offers a counterpoint: a facility that grows with revenue, backs skill over security, and keeps control with the operator.
