How a national heavy machinery distributor secured $1M in trade finance after their financier exited Australia

This established heavy machinery distributor had built an impressive operation since 2006. With over 100 staff and a comprehensive offering spanning new and used equipment sales, machinery rental, servicing and spare parts, they had become specialists serving the earth-moving, construction, forestry, material handling and quarry industries across Australia.

Their business model required significant working capital. Heavy machinery and parts procurement—particularly from overseas suppliers—involved substantial upfront costs, with revenue realised only after sales, rentals or service completion. To manage this cash flow cycle, the business had established a quasi trade finance facility with another financier in 2017.

However, in a situation beyond their control, their existing financier made a strategic decision to stop offering those facilities in Australia. This left the business facing an urgent challenge:

• Loss of existing trade finance facility that had supported operations since 2017
• Need to maintain supplier relationships both overseas and domestically
• Working capital requirements for large machinery and parts purchases
• Time-sensitive supplier payments that couldn't wait for lengthy facility approvals
• Growth momentum that required uninterrupted access to working capital

The business had strong fundamentals—solid profitability, healthy balance sheet equity, and no creditor pressure. However, without a replacement facility, they risked:

• Damaging relationships with key overseas and domestic suppliers
• Missing opportunities to secure inventory for growing customer demand
• Constraining growth due to working capital limitations
• Operating under cash flow pressure despite strong underlying performance

The company's financial adviser approached Octet to discuss a solution that would provide the working capital to pay key part and machinery suppliers, both overseas and domestically.

Octet assessed the company's situation and recognised the strength of the underlying business.

Despite the disruption of losing their existing facility, the company demonstrated:

• Strong profitability across their diversified operations
• Solid balance sheet equity built over nearly 15 years of trading
• No creditor pressure indicating good supplier relationships and financial management
• Established market position serving multiple industries across Australia
• Diversified revenue streams from equipment sales, rental, servicing and parts

Based on this assessment, Octet approved a $1 million Trade Finance facility tailored to the business's needs.

The facility provided:

• Working capital for key suppliers both overseas and domestically
• Up to 60 days interest-free terms on supplier payments
• Up to 120 days total repayment terms
• Flexibility for large machinery purchases freeing up working capital for substantial expenses
• Support for supplier relationships through guaranteed, timely payments
• Revolving credit line that reset as payments were made

The Trade Finance structure was particularly well-suited to the heavy machinery industry, where:

• Individual purchases can be substantial
• Overseas suppliers require reliable payment terms
• Inventory holding periods can be extended
• Multiple revenue streams (sales, rental, service, parts) require coordinated working capital management

The $1 million Trade Finance facility achieved the immediate objective of replacing the exited financier's facility whilst positioning the business for continued expansion.

The outcomes included:

• Seamless transition from previous facility without disruption to supplier relationships
• Working capital for large expenses across machinery and parts procurement
• Maintained strong supplier relationships both overseas and domestically
• Freed up cash flow to support diversified operations across sales, rental, servicing and parts
• Positioned for growth with revenues expected to continue expanding
• Confidence to pursue opportunities in the next exciting phase of development

The facility effectively freed up working capital for the substantial expenses typical in heavy machinery distribution, allowing the company to maintain good working relationships with their suppliers whilst pursuing growth opportunities across their target industries.

The client could now move forward confidently into the next phase of their development. With strong fundamentals and reliable access to working capital, revenues were expected to continue growing over the following 24 months—supporting expansion across their earth-moving, construction, forestry, material handling and quarry customer base.

The revolving nature of the facility meant the business could continue to draw down funds for supplier payments, repay as revenue was realised, and access the facility again—creating a sustainable working capital solution that supported their business model and growth trajectory.

For businesses distributing heavy machinery, equipment and parts, managing working capital across substantial purchases, extended inventory holding periods, and diverse revenue streams is critical. When your existing financier exits the market or your business outgrows current facilities, finding the right replacement quickly is essential.

Octet specialises in Trade Finance solutions for the heavy machinery and equipment sector, with facilities structured to support both overseas and domestic supplier payments. We can move quickly to assess your situation and provide facilities that maintain supplier relationships whilst supporting your growth plans.

Talk to our team today to discuss how Octet's Trade Finance solutions can support your heavy machinery distribution business. Whether you're replacing an existing facility or seeking additional working capital for growth, we can structure a solution tailored to your needs.