Business uses debtor finance to unlock full potential and scale operations

The company was experiencing the classic issue of success outpacing financial resources. Despite its exceptional sales and a healthy client base, the company’s liquidity was stretched due to the cash flow challenges typical of project-based work. Upfront costs for labour, equipment and materials had to be covered before invoices could be raised, while delayed payment cycles and retention amounts tied up much-needed working capital.

Without sufficient working capital to cover upfront project costs, they were forced to be selective about new opportunities, even those that could drive further growth. The business was also managing an ATO repayment plan, which added further pressure to their already strained cash position.

Adding to these stressors, approximately 50% of the company’s sales were concentrated with a single, large mining operation. This was excellent for revenue stability but it also meant that most of the company’s cash flow was stuck in unpaid invoices from one client.

Project delays, change orders and material cost volatility further amplified the unpredictability of cash flow timing, making it difficult to maintain operations or plan for growth initiatives.

Needing a finance solution to fuel further business growth, the company reached out to Octet.

“Traffic Management operations, in fact any labour-oriented businesses, often face particular cash flow pressures due to the nature of their work and the payment terms common in the construction and mining sectors,” explained Nigel Thayer, Octet’s Director Working Capital Solutions – WA. “Our solution needed to unlock the substantial value tied up in their outstanding invoices while providing the flexibility to scale operations confidently.”

Nigel worked with the company to structure a $2.25 million Debtor Finance facility to address their cash flow challenges. The debtor finance facility converted their unpaid customer invoices into immediate working capital, allowing the business to access up to 85% of their invoice values upfront.

This solution directly addressed the company’s core challenge by reducing reliance on client payment timelines. Importantly, the confidential nature of the facility meant that the company’s clients remained unaware of the financing arrangement, preserving the strong relationships they had built over their 10-year history. This was particularly crucial given their significant relationship with their major mining client.

“The beauty of this solution is that it grows with the business,” said Nigel. “As their sales continue to expand and they take on larger jobs, the facility automatically scales to provide the working capital support they need without requiring renegotiation or additional approvals.”

With immediate access to cash previously tied up in unpaid invoices, the company now operates with the financial confidence needed to bid on larger contracts without the constraint of upfront capital requirements.

The improved cash flow position has enabled the business to negotiate early-payment discounts with suppliers, directly improving their project margins and overall profitability. They have also been able to invest in upgraded equipment and skilled labour, enhancing their service delivery capabilities and competitive positioning in the regional market.

Crucially, debtor finance has provided the necessary cash flow to maintain and reduce their ATO repayment plan, removing a significant source of financial pressure. The improved liquidity has also allowed the owners to repay shareholder loans that had been injected into the business during earlier growth phases, strengthening the company’s balance sheet and reducing personal financial exposure.

“This business now has the financial flexibility to take on additional customers and larger orders with staggered payment terms and can plan their growth with confidence,” said Nigel. “They’re no longer constrained by cash flow timing issues and can focus on what they do best – delivering safe traffic management services across regional Western Australia.”

With their solid financial foundation now in place, the company is well-positioned to continue their growth trajectory while maintaining the high standards that have built their reputation in the market.

Debtor & Invoice Finance can unlock the full potential of established businesses ready to scale operations. For companies in a wide range of business, such as labour hire, transport, and wholesalers, Octet offers tailored debtor finance solutions designed to address the unique cash flow challenges of project work while supporting sustainable growth and operational efficiency.

Talk to our working capital specialists today and take the next step toward sustainable growth.