Working Capital Independence for a Trans-Tasman Coffee Importer

Summary 

A New Zealand-based coffee importer, part of a wider Australasian and US distribution network, sought to reduce its financial dependence on its Australian parent. By deploying a structured working capital solution comprising invoice and trade finance facilities, Lock Finance enabled the business to pursue autonomous growth, eliminate unnecessary costs, and build financial resilience within the local operation.

The Strategic Imperative: Local Autonomy

For many subsidiaries operating beneath the umbrella of a foreign parent, financial independence remains elusive. This was the case for a New Zealand-based importer and distributor of green coffee beans, whose growth ambitions were stifled by structural reliance on Australian capital.

Despite possessing a viable domestic strategy and a growing client base, the business was hindered by two critical constraints:

• A low-capacity invoice finance facility that failed to scale in line with sales
• A lack of trade finance, which is necessary to meet the capital demands of importing green coffee at volume

These limitations had knock-on effects. Cash flow volatility led to unnecessary double foreign exchange conversions, while shipping delays, exacerbated by underfunding, triggered avoidable demurrage and storage charges at the port.

The Intervention: Fit-for-Purpose Working Capital Facilities

Lock Finance structured a dual-facility solution designed to address both liquidity timing and import-related capital constraints.

1. Invoice Finance Facility Increased advance rates on local receivables improved cash availability, allowing the business to fund operations from its own trading activity rather than await intercompany transfers.
2. A Purchase Order Finance Facility provided the company with the ability to pre-fund import transactions, aligning supplier payments with inventory cycles and improving the firm’s negotiating position with overseas vendors.

Together, the facilities replaced a fragmented funding environment with a coherent capital strategy rooted in local performance.

Outcomes: Efficiency Gains and Strategic Independence

Within six months of implementation, the impact was material:

• Dependence on Australian capital was reduced by more than 80%, enabling the NZ business to self-finance its growth
• Port-related costs fell by over 20%, driven by earlier clearance and reduced storage time
• Supplier relationships improved, allowing the business to access preferential terms and volume discounts
• Decision-making autonomy increased, enabling management to allocate capital with greater agility and foresight
• Removed unnecessary costs such as double foreign exchange conversion

“The most valuable outcome was not simply access to capital, but control over our own decisions. We now operate with the confidence of a standalone business.” — General Manager, New Zealand

Broader Lessons: Financing for Mid-Market Importers

The case underscores a broader truth: while many mid-sized firms operate with global linkages, they are best served when capital decisions reflect local conditions. For importers in particular, a facility designed for retail banking or general corporate credit is often too blunt an instrument.

Working capital solutions that respond directly to receivables and inventory flows, such as those offered by Lock Finance, provide a sharper and more flexible response to funding needs.