The Challenge

Jake S.* owns a plumbing company in Victoria that takes on large commercial projects, like shopping centres. His business has a great reputation and a staff of 35, but like many businesses, occasionally runs into difficulty paying bills. This happens due to lengthy invoicing periods and when major projects get pushed back by months, or builders delay payments for his services. The impact is that he gets left without sufficient cash to cover the costs of supplies and staff wages.

Although Jake’s business has a $50,000 overdraft facility with Westpac, he couldn’t secure additional funding from the bank, or any non-bank lender, because he doesn’t own any property to use as security. Furthermore, he says, “the big four banks are risk averse” and businesses in the construction industry struggle to secure funds as a result.

Jake turned to a non-bank lender, who, like the bank, said they couldn’t assist a business with his risk profile. However, the lender recommended he contact Bizcap.

The Solution:

When considering Jake’s first loan application, Bizcap saw that he had a long-standing business with relatively good cash flow and account conduct, as well as a healthy credit score.

At first, Jake did not provide Bizcap with his full financial statements, so we offered him a low-doc Starter Loan of $165,000. The objective of the Starter Loan is to build a relationship with the customer to ensure they can manage the repayments and build from there, so long as the loan and the business’s financial situation are in good stead.

Once we saw that Jake’s business could reliably and consistently repay the loan, that his business was growing, and that he was able to supply additional financial documents that gave us a greater visibility over the strength and health of his business, we were willing to lend him $325,000 the next time he applied, and $350,000 the time after that. To date, he has taken out five Bizcap Small Business Loans to the sum of more than $1.13 million.

Every time he wants a renewal, Jake emails or calls Avi, his personal Bizcap Loan Specialist, and with minimal paperwork – just his updated bank statements and basic financial documents – Bizcap makes him an offer and gets the funds to him in a matter of hours.

“I couldn’t fault Avi,” says Jake. “He’s very helpful. There was a time when we couldn’t make a repayment and he was able to work with the Customer Service team to put the payments on a temporary pause. No other lender would’ve done that.”

The Outcome:

Jake’s plumbing business has weathered the storms of cash flow gaps by leveraging Bizcap’s loans to pay suppliers and staff on time. “It’s meant I can retain staff rather than letting them go, and it’s improved our relationships with suppliers,” says Jake. “Sometimes I do a cost-benefit analysis of taking out a Bizcap loan even though I don’t have cash flow gaps, so that I can pay my suppliers on time in order to build relationships with them.”

Not only that; the business’s monthly revenue has grown from a low of $350,000 during its toughest times, to a high of $900,000 last month. It’s a fantastic result, says Jake, especially given that an average of almost 1000 businesses closed every day across Australia in the last financial year.

“We wouldn’t have survived without Bizcap’s help,” says Jake. “They’re expensive, but they take on risk that others won’t, so it’s fair enough.”

What gave Jake the confidence that he could repay the loans? “It’s always dark before dawn,” he says. “We need help during the bad times and have always known that the industry would turn a corner — plus we’ve got a good reputation — so we knew the good times would help us repay the debt.”

The Bizcap Difference:

It is the speed at which Bizcap can fund Jake’s loan applications, the size of loans we are willing to offer his business, and the holistic approach we take when assessing his financial statements that retains Jake as a loyal customer.

“The speed, the personable approach, the willingness to listen to the business owner rather than just the financials.”

“At times my financial statements weren’t that great but I was able to tell Bizcap why, and they took that into account,” he said.

“They’re willing to work with you,” he adds. “They don't want to see you fall over and they don’t want to be chasing their money from a company that can’t pay it back, so they work with you to find a solution and see you come out the other end.”

“We probably wouldn’t still be around if it wasn't for the loans and help we got from Bizcap.”

*Not his real name. The name of the plumbing business owner has been changed to protect his privacy.

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