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Case Study 5

Startup Business

Forecasted Annual Turnover $750,000

The Problem:

This start-up wholesale firm was unable to secure traditional funding lines, due to being a start-up business and lack of property security. The business was operating on shareholder funds but this was not enough, coupled with a lack of continued equity support from one shareholder until external funding lines were implemented.

The Solution:

The director approached PFBS for funding options. Debtor Finance stood out as the ideal solution. The Debtor Finance facility released 80% of outstanding invoices at the inception of the facility, thereby providing an immediate injection of cash into the business, to pay its workers and suppliers; and suppressed the need for any further capital injection from shareholders. The accounts manager would upload the weekly invoices to the financier for their 80% advance on funds to meet their weekly cash flow requirements. As customers paid the remaining 20% was released on that day to further support the business cash flow requirements.

The Outcome:

The business is steadily growing with the support of their debtor finance facility. This has greatly reduced their stress of meeting business monthly expenses, and given the director to confidentially seek out new business. It is anticipated a trade facility will be adopted in due course.

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