National Group Bridges the Gap
Large contract opportunity
The Long No: Bank says Yes but then unable to help long-term client
- 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
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.
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.