Lock Finance were introduced to a metal fabrication business who were still growing but constantly hitting the limit of their overdraft facility with their bank. As with many privately owned businesses the family home had been leveraged to the maximum in support of this growth previously. There were no further assets for the bank to lend against and GST and PAYE arrears meant there were credit restrictions on how far the bank could help their customer. Meanwhile this business also had some construction customers which meant there were retentions involved, collectable in a years time, further hampering cash flow.
The main supplier was threatening to stop supply of materials due to late payments and the debtors were paying after 60 days.
The owner wasn't aware that the Debtor Finance solution provided by Lock Finance even existed so when we started talking to him about how we could help you could see the relief start to show as he realized there was not only a survival strategy for his business but a sustainable business to continue.
From the debtors ledger of $370k Lock Finance released enough funds to clear the PAYE arrears (a huge relief for the business owner); make a sizeable lump to the GST and get the remaining into an arrangement; bring the main supplier back to current so that supply of materials could continue without interrupting business and there was still enough to pay the ongoing bills and wages. The owner could trade onwards, accepting a new contract, which in turn generated more invoicing which in turn released more cash via the Lock Finance debtor finance facility into the business.
Having a cashflow in reach within 24 hours of issuing invoices has enabled this business to continue on and remain trading for many years to come.