How a WA manufacturer secured $900K in combined facilities to launch a new business division

This family-owned group had built a solid reputation since 1971, providing manufacturing, fabrication and wholesale services to Western Australia's mining, resources, civil and engineering sectors. Their experienced management team had consistently delivered increasing revenue and solid profits throughout the years.

In December 2019, the group identified a strategic opportunity: acquiring the assets of an existing blasting and painting company to establish a new division. This would complement their existing manufacturing and fabrication services whilst opening up additional revenue streams within their target sectors.

However, launching this new business created specific challenges:

• Working capital requirements for establishing operations in a new division
• Asset acquisition funding to complete the purchase
• Cash flow needs to bridge the gap between operational costs and customer payments
• Growth capital to expand services across the group's extensive existing client network

Despite the parent group's strong track record and financial position, the new entity required its own dedicated funding facilities to establish operations and support expansion. The business needed a finance partner who understood their group structure and could provide flexible facilities tailored to the new division's specific needs.

The company approached Octet to discuss a solution that would meet their needs and fund their working capital outlay.

Octet assessed the opportunity and recognised the strength of the parent group's position. Based on the group's experienced management and solid track record—including a history of increasing revenue and solid profits throughout the years—Octet approved a comprehensive funding package for the new division.

Octet delivered:

• $700K Debtor Finance facility to unlock cash flow tied up in invoices, allowing the business to access up to 85% of their accounts receivable immediately rather than waiting for customer payments
• $200K Trade Finance facility to fund procurement and supplier payments, with up to 60 days interest-free and 120-day repayment terms

This combined approach provided:

• Immediate working capital to establish operations
• Cash flow flexibility across both receivables and payables
• Support for asset acquisition and business establishment
• Capacity for growth across the group's extensive client network
• Revolving facilities that reset as payments were made, providing ongoing access to capital

The facilities were structured to complement each other: the Debtor Finance facility converted invoices into immediate cash flow, whilst the Trade Finance facility supported supplier payments and procurement—creating a comprehensive working capital solution for the new division.

The new working capital facilities provided the company with the cash flow needed to establish its new blasting and painting business and position it for future expansion.

The outcomes included:

• Successfully established the new blasting and painting division
• Secured working capital to support day-to-day operations
• Positioned for growth across the parent group's extensive existing client network
• Complementary services added to the group's manufacturing and fabrication offerings
• Forecast continuing along the path of sound profit and growth

Given the extensive network of existing clients within the group (spanning mining, resources, civil and engineering sectors) the new company was well-placed to distribute its services to an even wider customer base. The blasting and painting services complemented the group's existing manufacturing and fabrication capabilities, creating cross-selling opportunities and additional value for clients.

With the aid of Octet's funding, the business could focus on establishing operations, building the division, and capitalising on the parent group's strong market position and client relationships—confident that their working capital facilities would support both immediate needs and future expansion.

For manufacturing businesses launching new divisions, acquiring assets, or expanding service offerings, having the right combination of working capital facilities can make all the difference.

Octet specialises in tailored funding solutions for the manufacturing sector, with the flexibility to combine Debtor Finance and Trade Finance facilities to meet your specific needs.

Whether you're part of an established group or a standalone operation, we can structure facilities that support both your immediate working capital requirements and long-term growth objectives.

Talk to our team today to discuss how Octet's combined finance solutions can support your manufacturing business. We'll assess your situation and can structure facilities that work together to provide comprehensive working capital support.