A small group of related service businesses faced unexpected costs at a time when confirmed work was already in the pipeline.
The requirement itself was relatively modest, but the wider position was more complex. Line Capital looked across the group’s financial information and current bank data to understand where the underlying serviceability sat.
The team also worked through the context behind some unusual items in the business’s credit history rather than considering them in isolation.
A fast-growing food importer had planned to fund the final payment on its new warehouse from cashflow, until a product recall by one of its suppliers changed that.
The business received more than $1 million in credit notes, which it reinvested in replacement stock, but that stock would take several months to arrive and sell through.
Line Capital looked beyond the temporary cash gap to the wider position, including revenue growth of more than 50% and a solid liquidity position. The facility also consolidated an existing short-term loan.
An owner-operated transport business running a fixed daily route under contract faced unexpected maintenance costs on its truck, with the time off the road during repairs adding further pressure on cashflow.
As an existing client, the business came back to Line Capital for additional working capital.
The team looked at the stability of the contracted revenue, strong growth in the latest financial year and underlying profitability once the one-off repair costs were set aside, rather than considering a highly geared balance sheet in isolation.
The new loan also consolidated the existing Line Capital balance into a single facility.
A small group operating across two related service businesses needed additional working capital after unexpected costs created a short-term cash-flow gap.
Importantly, the businesses still had confirmed work ahead.
The immediate requirement was therefore not about funding ongoing losses. It was about creating some breathing room while the business met an unplanned cost and moved into work that was already in the pipeline.
The wider position needed some context.
Line Capital reviewed financial information across both businesses, along with current bank transaction data, to understand where the strongest trading performance sat and whether the group could support the proposed lending.There were also several items in the wider credit profile that required explanation.
Rather than treating those items at face value, the lending team looked at the circumstances behind them and separated genuine credit risk from matters that were subject to ongoing disputes or correction.
That broader assessment provided a clearer picture of both the unexpected requirement and the businesses behind it.
Line Capital provided a $30,000 term loan over 24 months.
The funding helped bridge the short-term cash-flow gap while the group moved into confirmed work already in its pipeline.
The nature of the unexpected cost, the amount required and how the business expects to move forward can all influence the funding requirement.
That’s why the right funding option won’t necessarily be the same for every unplanned business expense.
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 has happened, what the business needs to deal with now and what the position looks like once the immediate cost has been worked through.
We can look at the requirement, the wider context and the funding options that may fit.
Use our calculator to see how a simple interest rate compares with its annualised equivalent.
The unexpected cost itself is only one part of the assessment.
We want to understand what caused the requirement, whether it is genuinely temporary and what the business looks like once that immediate issue has been addressed.
We’ll also look at the wider trading position and whether the business can comfortably support the proposed lending from its ongoing cash flow.
A one-off expense in an otherwise sustainable business is different from repeatedly borrowing to cover an underlying shortfall.
That context helps us understand whether funding the unexpected cost makes commercial 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 has happened, what the business needs now and what the position looks like once the immediate issue has been dealt with.
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.