Expansion Finance & Bank Guarantee
$3.5m Commercial Facilities
Service
Business & Corporate Finance
Funding Amount
$3.5m
Funding Purpose
Venue Fit-Out & Rental Bond
Industry
Hospitality
The Scope
- The client was wanting to expand into a new market interstate and located a prime inner city location for their new hospitality venue.
- The client had no tangible security to offer and lending was to be secured by cash flow and personal guarantees.
- Fit-out totalled circa $5.0m and the client was unsure of debt capacity and leverage parameters.
- The existing bank declined the transaction (client had transactional accounts and had never borrowed onshore).
- The existing business had a solid trading history, but the transaction required the lender to adopt the forecasts of the new venue into the servicing illustration.
What We Did
- We prepared a historical and forecast financial model, so a lender could easily understand the cash flow and the assumptions behind the forecast.
- The Group had a very complex and detailed internal finance function which we believed a lender in the $5m space would struggle to understand.
- We prepared a detailed information memorandum for the market engagement which we were confident would provide a lender comfort to support the group for the requested new loan monies.
The Result
- $3.0m new term debt facility for the fit-out of the new venue.
- $500k bank guarantee not secured by cash – this enabled the group to free up $500k as the existing bank wanted the bank guarantee secured “$1 for $1”.
