Working Capital Facility Renegotiation
$5.5m Commercial Facilities
Service
Business & Corporate Finance
Funding Amount
$5.5m
Funding Purpose
Working Capital & Acquisition Facilities
Industry
Retail
The Scope
- The client had an existing working capital facility to assist with their working capital gap.
- Due to increased demand and concerns around supply chain constraints, the client required an additional short term working capital facility.
- While the additional short-term working finance was in place the client realised there were significant strategic benefits to having the additional working capital facility.
- We were engaged to formalize the additional short-term working capital facility to an ongoing revolving facility.
- In conjunction with extending the working capital facility, we also undertook an interest rate review and established lender appetite for future funding.
What We Did
- Prepared comprehensive information memorandum summarizing the performance over the past 12 months.
- Cleary articulated the rationale behind the ongoing requirement for a larger working capital facility.
- Highlighted the re-investment in the business through additional self-funding of inventory.
- Illustrated the significant improvement in the credit risk profile of the business over the last 12 months which warranted the reduction of credit risk margin and supported appetite for additional borrowings.
The Result
- The Bank approved the formalization and extension of the additional working capital facility with with no further conditions or covenants and a pricing improvement.
- The credit risk margin across the Group was significantly reduced saving over $45k per annum in interest.
- Further funding appetite of $4m was agreed to without additional security required to be pledged.
