Earthmoving business has trouble raising finance to fund new contract.
Loan amount: $2 million
Client: Family run business
An established earthmoving business in North Queensland had endured a slump following a downturn in available work in their local area.
To get the business back on track the client started tendering for contracts in the mining industry, a different sector to where they’d usually done business. The client was eventually rewarded with a long-term contract that had the potential to turn the business around. All they needed was $1,400,000 in new and used equipment and $600,000 in working capital to assist with cashflow.
Problems arose when several major lenders rejected loan applications due to the decline in the company’s previous financial performance, as well as this being their first major contract for some time.
“There was no support from the banks we’d always used. They couldn’t see that we had a solid long-term contract and the experience to service it as long as we got the finance to buy the equipment we needed. I was beyond frustrated!” the client said.
Arete Finance worked with the client to present a loan application that ticked the majority of a lenders loan criteria which resulted in an ‘approval’. This allowed the business to acquire 12 pieces of equipment to service the new contract.
The client is very pleased with the outcome and is now considering further equipment purchases to continue to grow the business.
“If we didn’t get the equipment required for the contract, I would have had to give it up, and I’m not sure how long our business would have survived without it. We’re in full swing now, and the contract will bring in $3 - $4 million annually. I couldn’t be more grateful and happy with the work done by Arete Finance.”
If you know of a business that’s having trouble raising finance for a new contract, please contact me today.
Image supplied by: Hyundai