A small action-sports equipment retailer had come through a loss-making year and returned to profit as trading recovered.
The business now needed working capital to maintain stock levels ahead of the coming season and support the improved trading position.
The improvement was visible in the numbers. Revenue had increased from $180,000 to $275,000, gross profit had risen sharply and a $20,000 EBITDA loss had become a reported profit of $35,000.
The director had also supported the business personally through the loss-making period. That commitment had helped it reach the turnaround point, but as a small, asset-light retailer, the company still had limited tangible security to offer a traditional lender.
The funding requirement itself was modest and specific: $30,000 to purchase stock ahead of the season and support continued trading following the return to profit.
A return to profit was encouraging, but one improved year was not enough on its own. The assessment needed to establish whether the recovery was genuine and visible in the way money was moving through the business.
Bank transaction data supported the uplift. Even so, a more conservative EBITDA figure was used for serviceability rather than relying on the full reported profit. The director had also funded much of the previous loss-making year through personal cash contributions.
The facility was deliberately kept to $30,000 and linked to a defined stock requirement. A GSA and personal guarantee provided the available security. Repayment coverage was tight, but remained within policy, making the approved amount proportionate to both the opportunity and the stage of the turnaround.
The improvement extended across the key measures. Revenue increased from $180,000 in FY25 to $275,000 in FY26, gross profit rose from $45,000 to $140,000 and reported EBITDA moved from a $20,000 loss to a $35,000 profit.
For serviceability, a more conservative bank-data-adjusted EBITDA figure of $25,000 was used. This produced projected DSCR of 1.2x – meeting, but not exceeding, the 1.20x policy threshold. That narrow margin reinforced the decision to keep the facility modest.
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