A solid business model, loyal customers and growing demand for its products — it was the ideal formula for this thriving and growing telecommunications parts and components wholesaler. But the business’s available cash flow couldn’t support its desired growth.
The wholesaler was on a growth trajectory and didn’t want to slow down, so it needed a finance partner who could respond quickly, tailor a business cash flow funding solution and provide finance immediately. Enter Octet.
Growth trajectory outpaced existing working capital
This Western Australian-based network and telecommunications parts wholesaler has established itself as a trusted source of products and components. The business supplies other professionals in the electrical and communications sector in Western Australia, South Australia and Victoria — and it’s growing fast. Unfortunately, its available capital couldn’t support that level of growth.
“The business is poised to more than triple the sales growth achieved in 2022–23,” says Nigel Thayer, Octet’s WA Director of Working Capital Solutions. “It needed a flexible cash flow funding line to achieve that.
“Due to the month-on-month sales growth, the business had also struggled to meet its tax obligations on time, so it had a repayment plan in place. It needed a financier that understood the business and could support its growth aspirations.”
Business cash flow funding solutions for now and into the future
A trusted finance broker recommended Octet. “After analysing the business’ receivables ledger and financial data, we organised an introductory and discovery meeting,” says Nigel.
We wanted to understand not only the business’s current funding needs, but also its growth forecasts. “We were eager to ensure we could implement a product that catered to its funding needs now and into the future.”
Our Debtor Finance and Trade Finance solutions did just that. “We proposed and approved a notified invoice discounting line with a $600,000 funding limit,” says Nigel. “This provided the business with a line of credit, including an 85% advance rate against the ongoing receivables ledger, which means it can access up to 85% of its invoices as cash within 24 hours of customer sales.
“We also added a small trade finance facility with a $40,000 limit. This allows the business to pay international and Australian suppliers more immediately with up to 120-day repayment terms to Octet.”
Immediate and flexible funding supports expansion
Rapidly growing businesses need finance partners who are responsive, flexible and fast. “We had our meeting booked in with the business before other lenders had even responded to its request to meet,” says Nigel. “And our offer was very competitive.”
The business needed to be confident that its finance partner could approve and settle a new facility and provide the necessary funding for its rapid growth straight away. We delivered.
“Upon settlement, the business could immediately draw on the facility. This provided it with an instant cash flow boost against its existing receivables ledger.”
The business used this to pay its key suppliers to increase stock and meet the growing customer demand.
“Since joining Octet, it’s been operating with a superior cash flow position, taking away the growing pains it was suffering due to a lack of capital. With the enhanced cash position, the business can now take on larger orders and pay their suppliers on time,” Nigel says.
A finance facility that grows with the business
Octet’s Debtor Finance solution is designed to meet the business’s short- and long-term needs. “We structured the facility to enable an increased level of funding that coincides with the business’s sales growth,” says Nigel.
Our responsiveness and ability to provide comprehensive solutions tailored to the business were amongst the keys to its recent growth and success. “Put simply, we listen to our clients’ needs and provide solutions that meet those needs,” says Nigel. “We don’t just look for the large transactions. We can provide sub-$1 million debtor finance facility limits and can include tax repayment aspects for those businesses that need it.”
Realise your business potential and grow with Octet
Looking to grow? Is your current business cash flow funding solution holding you back? We help businesses in a variety of industries, including IT hardware and equipment, healthcare, transport and labour hire.
Our team of specialists can create working capital and payments solutions based on your unique needs. Contact us today to discover more.
Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as at the date of publication and are subject to change without notice.