How a national transport group secured $8M in debtor finance across nine entities to fuel turnaround

This well-established transport and logistics group had built a strong foundation since 1991, providing integrated supply chain solutions across metropolitan areas in Australia and New Zealand. Their specialisation in customised, on-demand services across industrial, consumer and health sectors had created a diverse, multi-entity operation.

However, the group faced a critical challenge. Despite having financing with a major bank, several factors (including unsupportive banking relationships) had led to a recent profit downturn.

A new management team had developed a robust turnaround plan, but executing that plan required something the existing banking relationship couldn't provide: flexible working capital that could support transformation whilst the business returned to profitability.

The specific challenges included:

• Restrictive existing bank finance that limited operational flexibility
• Need to free up working capital to execute turnaround initiatives
• Multiple entities within the group requiring coordinated funding
• Productivity improvement projects that needed capital investment
• Growth opportunities that couldn't be pursued under existing constraints
• Cash flow management across diverse operations and sectors

The group needed a finance partner who could look beyond recent profit downturn to recognise the strength of the underlying business, the quality of the new management team's turnaround plan, and the group's long trading history and market position.

The company's financial adviser approached Octet for a solution that would provide the additional working capital the group needed, allowing for greater flexibility to capitalise on productivity improvements and growth opportunities.

Octet assessed the group's situation and recognised the opportunity. Whilst numerous factors, including unsupportive banking relationships, had led to a recent profit downturn, Octet was confident that the new management team's robust plan would turn the business around in the near future.

Based on the group's 30-year trading history, established market position, and the strength of the turnaround plan, Octet approved an $8 million Debtor Finance solution across nine entities within the group.

This innovative structure provided:

• Single, flexible facility shared across multiple group entities, simplifying administration whilst providing comprehensive support
• Immediate working capital by converting up to 85% of accounts receivable into cash flow, rather than waiting for customer payments
• Flexibility to support turnaround initiatives including productivity improvements and growth projects
• Efficient cash flow management across the group's diverse operations in industrial, consumer and health sectors
• Freedom from restrictive banking relationships allowing the group to execute their strategic plan

The multi-entity structure was particularly important, allowing several entities to share a single facility whilst maintaining operational independence. This approach provided the working capital flexibility needed across the entire group whilst simplifying the funding arrangement.

The Debtor Finance facility provided the group with the tools needed to execute their turnaround plan and return to financial health.

The outcomes included:

• Repaid bank finance and freed up working capital previously constrained by restrictive banking relationships
• $8M facility providing substantial working capital across nine group entities
• Flexible funding structure supporting diverse operations across industrial, consumer and health sectors
• Enabled turnaround initiatives including productivity improvements and strategic projects
• Maximum cash flow efficiency across metropolitan operations in Australia and New Zealand
• Positioned for growth once turnaround objectives were achieved

With the facility in place, the group could focus on executing their management team's robust turnaround plan. Various projects aimed at returning the business to financial health could now be funded, and cash flows could be managed with maximum efficiency across all entities.

The revolving nature of the Debtor Finance facility meant that as customers paid their invoices, the facility reset—providing ongoing access to working capital as the group implemented their transformation strategy and pursued productivity improvements.

By partnering with a financier who could look beyond short-term profit challenges to recognise the underlying strength of the business and quality of the turnaround plan, the group secured the flexible working capital needed to execute their strategy and return to the growth trajectory that had defined their first three decades of operation.

For transport and logistics businesses managing turnarounds, implementing productivity improvements, or navigating periods of transformation, having flexible working capital can be critical to success.

Octet specialises in Debtor Finance solutions for the transport sector, with the ability to structure multi-entity facilities that provide comprehensive support across group operations. We assess businesses based on their underlying strength, market position, and strategic plans—not just recent profit performance.

Talk to our team today to discuss how Octet's Debtor Finance solutions can support your business transformation or growth plans. We can structure facilities across multiple entities and provide the flexible working capital you need to execute your strategy.