A relatively new distribution business had an opportunity to make a significant bulk stock purchase, with a strong expected margin when the inventory was sold.
“With limited historical financial information available, Line Capital looked at current bank transaction data to understand how the business was trading. As more recent information became available, the team reassessed the position and could see that both revenue and serviceability had strengthened.”
A growing e-commerce business needed to purchase inventory ahead of its busiest trading period.
“The business was relatively small and didn’t have property available as security, but its financial information showed growing revenue, improving margins and stronger earnings. Line Capital considered that wider trading position when assessing the requirement.”
An established construction services business had a strong pipeline of upcoming work following a quieter-than-usual period, but needed capital to purchase the stock and materials required to deliver it.
“Line Capital looked beyond the decline in revenue to understand what was happening in the business. Costs had moved with revenue, profitability remained stable and there was work ahead to support the requirement.”
A relatively new distribution business had the opportunity to make a significant bulk inventory purchase.
There was a strong commercial case behind the purchase, with the stock expected to generate a healthy return when sold. The challenge was that the business had only been trading for around a year and didn’t yet have the depth of historical financial information an established business might be able to provide.
Rather than treating the lack of historical financial statements as the end of the conversation, Line Capital looked at the information that was available.
Current bank transaction data provided a view of how the business was actually trading. And because some time passed between the initial assessment and the proposed drawdown, the team reviewed more recent trading information before proceeding.
That updated information showed a business in a stronger position, with increased revenue and improved serviceability.
The team also considered the commercial rationale for the stock purchase – including the expected return from the inventory and how the resulting sales would support repayment.
The amount of inventory you’re purchasing, why you’re buying it and how quickly it is expected to turn back into cash can all influence the funding requirement. That’s why the right funding option won’t necessarily be the same for every stock purchase.
For established small businesses with more modest funding requirements, including working capital, business investment, equipment purchases or growth.
For established SMEs looking to fund working capital, business growth, equipment or investment, with funding to support the next stage of the business.
You don't need to work that out before talking to us.
Tell us what you're looking to achieve and what's happening in the business, and we can look at the requirement, the broader context and the funding options that may fit.
The numbers are important, but they don't always tell the whole story.
We want to understand what you're looking to achieve, why the working capital is needed, how cash moves through the business and what happens next.
A temporary cash-flow gap, investment ahead of growth and an ongoing working-capital requirement are different situations. The context helps us understand both the requirement and the options that may make sense.
"Better outcomes start with better questions."
Our lending team works with New Zealand businesses across a broad range of funding needs and business situations. The team brings practical lending experience to assessing not just the numbers, but the context behind a funding request.
Tell us what you're looking to achieve and what's happening in the business. We'll ask the questions that help us understand the requirement, the wider business context and the funding options that may fit.
The information on this page is general in nature and does not take into account the specific circumstances of your business. Any lending is subject to Line Capital's lending criteria, assessment and applicable terms and conditions.