Lock Finance were approached by an Australian finance broker to consider providing finance to the New Zealand subsidiary of a substantial Australian parent company.

The Australian Parent company had been provided confirmation from their incumbent bank of an additional $5m asset finance on the back of winning some new contracts. They promptly withdrew funds from their business and set about enlarging their fleet and equipment in anticipation of gearing up for these new contracts. Due to changes in their Bank’s management and policies, the funding was subsequently withdrawn, leaving the client with a severe cashflow shortfall.

The broker was called upon to arrange financing for both the Australian parent company, and the New Zealand subsidiary company. The broker understood that a cashflow facility was what both businesses required so set about approaching an Australian based Invoice Finance Funder and a New Zealand Funder who would be able to finance their receivables to repay their existing bank working capital facilities. As Lock Finance is a longstanding New Zealand Invoice Finance funder with a good name we were approached.

The client had multiple shareholders, but all their assets were domiciled in Australia, this provided no real guarantor comfort in the event of business failure and coupled with an industry fraught with risk it was not a simple transaction. Lock Finance however structured a bespoke invoice finance facility that suited the clients cashflow requirements.

A$900k Invoice Finance Facility was able to improve the company’s cashflow immediately and was also a significant assistance when the New Zealand economy went into lockdown due to COVID-19.
The business is now trading well with a facility that will increase automatically as they grow with confidence that they will have the cashflow to support any new contracts they may get.