Working Capital

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.

How does a transport and logistics business recover from a partnership break-up? Particularly when the damage included a cash flow crisis, a voluntary administration (VA), and a long line of equipment financiers who did not want to support the restructured business?

A food manufacturing business with patchy financial statements won a supply contract with a national retailer that would potentially double revenues. Newly developed pre-prepared “fresh” meal products would be added its existing range of desserts. The manufacturing process, whilst similar, required investment in new equipment and working capital.