Payments to key suppliers are crucial to the viability of any business, especially when suppliers and wholesalers account for the majority of a company’s turnover. But how does a business remain on good terms with a supplier when unable to keep up with their obligations?
How does a start-up business raise money against used trucks in a post Royal Commission environment?
The owner of a transport business passed away and the deceased estate could find no more a suitable buyer than the business’ general manager (GM).
The GM set up a new entity for the purpose of completing the acquisition. As such, it was deemed a “new business” and was the first deterrent for traditional lenders, despite the fact that cash flow forecasts demonstrated a capacity to service.
This month’s case study highlights a special situations case where a transport company was depleted of its cash resources after the directors invested in a pub.
The cash burn on the pub venture led to ATO arrears in the transport business, ultimately making it impossible to fund the business through traditional means.
Recently, a mining services business dealing with the wet & dry hire of equipment encountered setbacks in the mobilisation of large contracts, after the fleet had been largely either mothballed or retrenched. Despite the long-standing business being historically successful, recent financial data indicated a lack of serviceability – bringing the business to a standstill. The need for funding new equipment, re-certification of mothballed equipment and further working capital was apparent, with a total funding requirement estimated for $1M.
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