Industry
Construction
Challenge
A fast-growing Sydney home builder needed working capital and longer supplier terms to keep pace with a large, contracted build program. Restrictions under its existing loans meant the funding had to be structured around the group, not just the operating company.
Results
Fifo Capital provided a $700k package: a $250k business loan and a $450k supply chain finance facility supported by trade credit insurance. The builder can now pay suppliers on time and fund its pipeline without refinancing its existing debt.
Key Product
Business Loan, Supply Chain Finance
The Challenge
The business was in a strong growth phase, with contracted work set to lift revenue significantly over the coming year. Like many builders scaling quickly, it was paying suppliers and subcontractors well ahead of progress payments, and its trade creditor balance was growing with it.
The directors wanted working capital in place quickly, and a way to pay suppliers on time without putting more strain on cash flow. Timing mattered: the build program was moving, and the directors had other funding options on the table.
The structure was not simple. Existing loans restricted new borrowing by the operating company, and the directors wanted to keep the security they offered in proportion to the amount being borrowed.
The Client needed:
- Fast access to working capital
- Longer terms to pay suppliers through a growth phase
- A structure that worked alongside existing lenders
- Security limited to a single property
The Solution
Fifo Capital provided a $700,000 package to the group’s holding company: a $250,000 business loan over 12 months on principal and interest repayments, and a $450,000 revolving supply chain finance facility that pays the builder’s supplier invoices on 90-day terms.
The package was secured by:
- A second-ranking mortgage over one residential property in Sydney
- Trade credit insurance supporting the supply chain finance facility
- A corporate guarantee from the operating building company, linked to the borrower through a cross-guarantee
- Personal guarantees from the directors and related parties
- General Security Agreements over the borrower and the operating company
With the property valued at approximately $5.2 million, the package sat within a combined LVR of approximately 83%. Trade credit insurance over the supply chain finance facility added a second, independent layer of support.
The business loan is repaid monthly from trading cash flow over 12 months, while the supply chain finance facility revolves on 90-day terms, subject to annual review.
The Results
- Final terms agreed and settled in under two weeks
- $250,000 of working capital available to the business at settlement
- Up to $450,000 to pay suppliers now and repay over 90 days, easing cash flow through rapid growth
- Existing lenders left in place, with no need for a broader refinance
- Security held to one property, with room to grow the facility as the relationship develops
Have a client in a similar position? Talk to our team or apply for a facility online today.
