Case study
Debtor finance
The company is a manufacturer of personal care products, sold through retailers. At the time the company came to Liberty, it was expanding rapidly. While this high margin business was profitable, the rapid expansion created the challenge of not having enough capital to expand the product lines to meet forward orders. The company’s overdraft was fully drawn and the bank was pressuring it to convert the overdraft to a term loan, secured by the director’s home.
The solution Liberty offered was a debtor finance facility to convert 80% of its $325,000 trade ledger into working capital, giving the company the injection of funds needed to purchase additional stock, supply forward orders and increase sales. Turnover, increased from $1.8M in the prior year to $2.4M after the facility was implemented. Sales increased by over $600,000 and resulted in a significant profit improvement for the company of more than half this amount.
*This case study is based on the experience of multiple customers. Details have been changed to protect their privacy.
