Sector: Telecommunications 

National Group Bridges the Gap

Large contract opportunity

The Long No: Bank says Yes but then unable to help long-term client

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Highlights

  • Established telecommunications business with $20 million turnover
  • Long term relationships with major customers
  • Large telco customer offers major contract opportunity which requires hiring and training new staff
  • Bank of 20 years unable to provide funding, having initially said yes to adding $200,000 to overdraft
  • Allbridge able to negotiate around GSA to provide working capital to start hiring

 

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Situation

A well-established telecommunications business with $20 million of annual turnover, operating Australia-wide, was given the opportunity to take on a $7 million contract. To do so, it needed to extend its bank overdraft to fund the work ahead. 

The Company employs a loyal and highly skilled workforce and the management team are industry stalwarts with strong networks within the industry.  

They approached their major bank of 20 years to see if they could get an extension on their existing $300,000 overdraft – 1.5% of turnover and used only at peak times – which was not secured on real estate. 

After 6 weeks, despite the bank saying they would be able to assist and everything was fine, there had been no progress. The situation was becoming increasingly concerning as the beginning of the contract drew closer.  

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Solution

The CFO of the Company was proactive and got in touch with Allbridge.

Our team was able to negotiate around the existing bank facility and provide $200,000 of funding at short notice, enabling work to begin for the valued client.  

Importantly, the facility is totally confidential (their customers are not involved) and there are no termination or hidden fees. The facility is totally flexible: it can be used as and when required, i.e. no lock-ins. This gave the management team confidence going forward that they can take on opportunities without needing to worry about funding them with a slow-moving bank.  

As the relationship developed over the subsequent 18 months, the Company closed its bank overdraft and our facility increased to $500,000 to facilitate further growth. 

Sector: Professional Services

Allbridge Finances Multi-Million Dollar Expansion Plans

 

Firm expands with Large Corporates and cash flow turns negative 

Banks not interested

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Highlights

  • Fast-growing company with $18 million of turnover and offices across Australia 
  • Blue chip customers: Large Corporates and Government entities 
  • Winning major contracts: long, uncertain payment cycle creating cash flow problems 
  • Allbridge provided $800,000 facility to facilitate significant growth in turnover and jobs
  • Decision in principle given same day and facility delivered exactly when needed
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Situation

Over a 10 year period, this Melbourne-based firm established a highly regarded position in providing value-added professional services to Large Corporates and Government entities. 

For a services business, it had a strong balance sheet but no real estate. The management team had ‘boot-strapped’ the business to reach turnover of $18 million in FY17. However, with debtors taking up to 60 days to pay, taking on new business and adding staff was becoming a worry.

Having approached a few major banks, it became clear that a bank overdraft of the required size was impossible without real estate backing.

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Solution

With blue-chip Accounts Receivable of over $2.5 million projected to grow to $5 million in 2018 and no existing debt facilities, Allbridge proposed providing the required $800,000 funding to finance the growth of the business. 

Our terms were well received: reasonable pricing, revolving facility, no contractual lock-in, completely confidential funding and the ability to increase the facility as the business grows.

Decision in principle by our team was given the same day and the facility was delivered exactly when needed.

The management team pushed forward with their growth plans, including hiring and training another 25 consultants to reach $25 million in turnover.

Sector: Marketing Services

Global Expansion Comes to Life

Firm expands globally and cash flow issues become stretched

Bank cannot help and equity terms are highly unattractive

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Highlights

  • Sydney-based company with over $10 million of turnover experiencing strong growth 
  • Blue chip customers: global household brands
  • Winning global contracts: capital intensive set-up, long payment cycle creating a growth headache 
  • Met with Allbridge, set up account within a day and funded the same day – extremely satisfied client 
  • Subsequently, expanded the facility to fund growth in their European business 
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Situation

Sydney-based firm aspires to establish a strong niche position in the global marketing services industry. Established over 15 years ago, the Company had developed strong relationships with global household brands by developing and leveraging world-class, innovative systems. 

The business has a strong balance sheet but had continually struggled to finance their expansion plans due to their debtors taking up to 95 days to pay. 

In 2015, having grown the business to $10 million of annual revenue, they secured a new global multi-million dollar contract which required them to establish a new office in Asia in partnership with the client.

The cashflow headache quickly became a migraine! 

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Solution

Prior to meeting Allbridge, the Company worked with a major accounting firm to explore all options, including a partial sale of the business to fund growth. Investor terms were not attractive - why give an external investor a large slice of what they had spent years building at a knock-down price? Banks could not help. 

The Company liked our terms: reasonable pricing, revolving facility, no contractual lock-in, completely confidential funding and the ability to increase the facility as the business grows. 

Starting with an initial facility of $500,000 to finance the Asian expansion in 2015, we subsequently provided a EUR 200,000 facility to finance expansion into Europe. Their European office is now expanding strongly and a further facility is being provided to enable further new contracts to be won - including one with a multi-national that takes 180 days to pay.