The Scenario
Recently established in January 2019, this award-winning freight forwarding company uses cutting-edge shipping systems to enhance freight movement and improve productivity. In its first year, the company secured major customers in Australia and the UK across a range of industries including construction, stationery and healthcare.
Going against the industry standard, this client covered all costs and only invoiced their customers at completion of delivery. While this approach helped the client secure major customers, it also meant they had a longer cash flow cycle. However, the relationships they built, and their unique service offering, meant the company experienced rapid growth, four times higher than projections. This resulted in a greater working capital requirement and a need for a transport financing solution to help bridge the gap.
The Solution
The company heard about Octet on the radio and visited the website to see how we could help to improve their working capital position. Octet worked closely with the company to understand their business, invoicing process, obligations and growth potential before suggesting a solution.
Octet provided a flexible transport financing solution that helped the company shorten the cash flow cycle and increase their working capital. The decision was based on the profitability of the business, the quality of the debtors and the quality of their paper trails.
With a $2.5 million Debtor Finance facility approved, the business can not only meet their statutory obligations, but is now well-placed to capture new opportunities to power their growth.
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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.
