Funding

Hermes was recently approached to consider a Management Buyout of a strongly performing manufacturing business. Despite numerous concerns, Hermes was able to tailor a unique funding solution to help acquire and position an appreciation of the true value of the business.

Last week, the financial press reported action being taken by the government to help SMEs better access capital and manage their cash flow. Highlights according to The Australian include forcing large corporations to adhere to 30-day terms and a $2 billion fund to be loaned to SMEs. In our case study this week, we demonstrate how Hermes Capital is ahead of the news cycle with cash flow solutions available that specifically address freeing up cash tied up in accounts receivable.

An engineering business had accumulated a $1,050,000 tax debt as a result of rapid growth in the civil infrastructure sector. This became a problem when the client needed to show equipment lenders a clear portal for further equipment purchases that needed financing. Hermes reviewed the client’s debtors as well as their other available assets, including a number of unencumbered heavy equipment items and some property with second mortgage equity.

It is not uncommon for many successful business owners, at some stage of their business life cycle, to be given the opportunity to acquire a business with a complimentary product or service. But how does the business fund this acquisition when the sale is on an all-in basis a majority of the time?

An air services business operating in the mining and energy sectors needed to fund the purchase of a new aircraft. The upturn in the mining sector meant increased demand for charter flights from large mining, civil and energy companies operating in the region.