Commencing business just over two years ago, this Western Australian-based labour hire business provides a specialised workforce to the mining and resources sector. During high demand seasons, weekly payroll requirements spike and put immense pressure on cash flow. The business is in prime position to grow significantly over the coming three years, off the back of increased activity in the WA mining and resources sector. The directors have property which could be used as security, however, their asset positions weren’t even and the amount of equity available wouldn’t carry them very far in a traditional bank facility.
Given the receivables ledger position at just over $1.5m, Octet implemented a $2m Confidential Invoice Discounting line, which would provide a revolving line of credit against the business’ unpaid invoices.
This ideal solution enabled three key outcomes:
- No requirement for property security
- Facility allowing them to draw on available funds only when needed
- Access to a funding facility that would grow along with their business
With the facility in place, the business now has a stable working capital base that is aligned to their sales. This has provided the directors with the security and comfort to know that in their peak trading periods they have sufficient funding to meet payroll spikes. In addition, they can continue to fund the expansion of the business through a robust period in the WA mining and resources economy.