After significant revenue growth, this Australian importer had plans to purchase another business. But the facilities offered by their current financier (a traditional bank) were slow and insufficient. Through a mutual connection referral, Octet designed a retail finance solution that would enable the company to seize more opportunities and accelerate growth.
Restrictive bank facilities hindered growth
As a major importer of a wide range of electronic goods (from vacuum cleaners to air fryers and massage chairs), this Australian brand had already achieved outstanding success. They had achieved annual sales of circa $65M selling their products on Amazon, Kogan and other online retail sites via their large double warehouse.
Although the company was thriving, the long- and short-term business finance facilities offered by their existing bank were relatively limited. Worse still, the bank took too long to make decisions and imposed onerous conditions and criteria, even though the business was flourishing.
An opportunity for growth arose: the chance to purchase another importing business. To capture this opportunity, the company needed an astute, forward-thinking finance partner.
Expansion without boundaries
The Australian importer planned to expand their company and purchase an importer of kitchen and cooking equipment. Through a foreign exchange (FX) solutions partnership and referral, they found Octet.
Joe Donnachie, Octet’s Supply Chain Finance Manager, knew this relationship could provide a significant advantage for the importer.
“Due to our partnership with the FX provider, the business could use their locked-in contracts/rates with us free of charge when transacting overseas,” Joe explains. “Most other financiers would practically mandate that they use their own FX, which might not be as competitive.”
After assessing the importer’s unique situation, Octet proposed a highly flexible trade finance facility.
“It’s unsecured, so it won’t impede on their existing bank covenants,” Joe says. “And because our smart cash flow finance keeps their bank facility separate, it simply provides the business with a useful cash flow top-up.”
This trade finance facility sits within the Octet supply chain platform and links the business to its suppliers, giving the business a cash flow boost and an added layer of support.
For security, Octet conducts verification checks on the suppliers and performs all necessary due diligence. Once the company reaches its facility limit, it gets up to 60 days interest-free and total repayment terms of up to 120 days.
A thriving new venture acquired
With a cash flow boost and funding provided by Octet, the company was able to launch its new importing venture with great success, and without impacting its current operations.
“With our funding facility, they could utilise the limit for their existing business and donate a portion of it towards the new entity to assist with cash flow,” Joe explains.
Importantly, the company has financial independence. “Rather than having to rely on their director’s assets or property for a business boost loan, they’re relying on the balance sheet strength of their own entity,” Joe says.
Octet understands how quickly things move in business. While traditional lenders can take up to six months to provide a solution, Octet is able to set up a finance facility within weeks for a near-instant business loan. Having faster access to funding means being able to grasp opportunities as they arise.
Plans for future growth
With plans to expand into a larger warehouse, the online retailer expects more of their cash flow to stream into this growth. And Octet will be there to ensure a smooth transition and assist with supply chain finance.
“We’ll be continuing support for their supply procurement and solely focused on accelerating the businesses supply chain,” Joe says. “This should free up working capital for them to continue expanding, whether this looks like a new warehouse or location, or even the acquisition of more businesses.”
Seize opportunities as they arise
Partnering with traditional lenders and big banks usually entails onerous conditions and lengthy waiting periods. However, your business needs flexibility if it is to make timely decisions and act on emerging opportunities.
After speaking with Octet, you could be accessing innovative trade finance facilities within a matter of weeks and seizing valuable opportunities for growth, too.
Build a fast and flexible partnership with Octet
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Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. 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 judgment as at the date of publication and are subject to change without notice.