Growing labour-hire business reduces working capital costs by 13%

“We are thrilled with the TP24 solution and have been sleeping easy knowing our future cash-flow has a solid, no-fuss foundation for growth opportunities and month-to-month expenses”

Tim – Managing director 

Industry

Labour hire

Company size

Medium
($19M turnover)

Location

NSW

CASE STUDY

A growing labour-hire business needs a flexible working capital solution

A Sydney based labour-hire company were growing their customer base in a tough market. They saw an opportunity to offer more frequent payments to their customers if they could optimise their own cash flow.

After researching the market, they applied for an invoice finance solution with a large, traditional non-bank lender in the hope that it would assist them with their cash flow, as their clients had over a month to pay them.

After a long process, they were offered a $1.5 million limit. Two months after settlement, they knew that it was not going to work for them.

THE PROBLEM

Traditional invoice financing was an unsuitable solution for their working capital needs

They were disappointed in the reality of the invoice finance solution they were offered as it consumed a lot of time verifying invoices and preparing reconciliations. Time they wanted to spend on growing the business.

This tedious process commonly associated with invoice financing began to stifle their cash flow. They were certainly not in a position to offer more frequent payments to their customers under the invoice finance product they were committed to.

Even though they hadn’t drawn down any money, their provider was controlling all their working capital and not releasing it until all the onerous administration requirements were continuously met.

THE SOLUTION

A debtor backed line of credit with TP24

TP24 was able to assist this company by providing a revolving Line of Credit supported by their debtors.

This solution provided Tim’s company with the following:

1.  Full control of their funds so they could access their money whenever they needed to.

2.  They were no longer required to provide continuous proof of debt checks and reconciliations.

3. The line of credit allowed them to receive up to 80% of eligible receivables, if they needed it.

The interest rate and product offered by TP24 were so compelling that they broke their existing contract with their invoice finance provider. The difference meant that the business saved 13% on facility costs per year.

THE RESULT

TP24’s Line of Credit allowed Tim’s company to reduce their funding costs, control their funds and spend more time growing instead of managing time consuming administrative tasks associated with Invoice Financing. Over the past financial year, this company grew 100% year on year.

When asked, Tim said “I would highly recommend the TP24 product and, more importantly, the team who have been fantastic in every interaction