Our client was a distributor servicing the greater Nelson city area. They provide imported wholesale food products to the local hospitality industry as well as grocers such as Foodstuffs and Woolworths. When they were introduced to Geneva Capital, the company had growth ambitions but were being held back by their current banking facility. The client had previously had to downsize in order to survive, which had earned them becoming a watchlist business with the bank, effectively meaning that the client downscaling further was the only option on the bank’s agenda. Another obstacle was the sales to the supermarket chains, who required discounts to bring down their payment terms, forcing a decision between the gross margin and their cashflow. Having identified a current
opportunity, the principle needed a finance product that would match.
For the opportunity to be realised the principle needed to access the greater Tasman Region, targeting more of the hospitality in the region, creating a greater brand and fulfilling increasing orders while operating out of an office off their family home. Invoice Finance was offered and once explained, seemed like a good fit. The client’s debtors all knew them given the smaller community and therefore the client wanted to maintain credit control and confidentiality. Handover was very easy given Geneva Capital’s relationships with the major banks, and the facility was functional within the month of first contact.
The most immediate benefit that the client saw was freeing up time for staff and easing their cashflow concerns through certainty. Knowing how much they would be receiving through the facility in the morning removed a lot of the cashflow guess work. This allowed the owner to go and see current clients for the first time in a long time, as well as targeting those businesses that seemed too difficult to reach in the past. The client was also less reliant on Progressives/Woolworths for their cashflow, which helped strengthen their gross margin. The faster cashflow cycle offered by the facility led to another opportunity, where the client was able to identify early payment and bulk buying discounts for their creditors, which helped offset the costs of the facility itself. The owner was able to invest time and funds into improving their social media presence, upgrading their website and within 18 months was winning local hospitality distribution awards.