Thanks to a Bizcap loan, Guru S was able to turn his young $500,000 logistics company into a $2.5 million business – within a year.
With the power to boost customer service, reduce operating costs and improve a company’s profitability, supply chain management is one of the most important parts of a business.
Customer expectation is high – they expect that goods will arrive quickly, on time and in perfect condition. But the transportation of goods can be a risky business.
The cash rotation is high, and the costing can be complex, which is why it can be tricky to secure loans for businesses in the industry. At least, that’s what Guru S found when he was trying to scale his business.
“I have a pretty young company, just two-and-a-half years old,” he explains. “The company operates on a low-cost model, and therefore it’s exposed to high risk. Our margins are low, so one default leads to high-risk exposure.”
Investing to grow
To grow the business, Guru S needed to access finance.
“In this business, you need to be strong liquidity-wise. And once that rotation is over, you get your money back, with a good margin.
“To get the equipment on the road and reap the actual benefits, I needed to be able to support the business for at least two-and-a-half months with salaries and other aspects around business,” says Guru S.
“I needed to access money, otherwise I would be losing the opportunity.”
Guru S contacted the major banks and other lenders, however, he met a brick wall on each occasion, with lenders not being able to foresee the potential of growth in Guru’s business as it did not ‘fit the mould’.
“Nobody lends you money unless you are three years old,” he says.
The business was in a difficult position and faced a harsh reality.
“I was about to go broke due to the lack of available cash,” reflects Guru S.
The Bizcap difference
After making some online enquiries, Guru S connected with Bizcap Customer Loan Specialist Tim.
“He called me up and asked me a few questions,” says Guru S. “He was detailed. He wanted to know a lot about the business, and it sounded like he was keen on helping me out.”
Despite supply chain logistics and transport being such a complex industry, Guru S felt Tim understood what he needed.
“When I was speaking to him, he listened, and he made sure he understood all of the points. He wanted to understand how a loan would help the business in the future.”
Another obstacle Guru S came up against was documentation, with many other banks and non-bank lenders requesting a lot.
Bizcap, however, looked at the statements and the turnover growth, which was fluctuating between 30 per cent and 35 per cent each quarter – enough to demonstrate the business was growing strongly.
Seizing the opportunity
Following discussions with Tim, it was agreed some cashflow capital would be hugely beneficial to the business, and Bizcap was even able to customise a product for Guru S.
“I didn’t want to come at it for the long-term,” he says, “so Tim customised a tailor-made product for me.
“The funds took me out of crisis.”
With the money organised, Guru S was able to turn a $500,000 company into a $2.5 million business within a year.
His success is proof that you just have to give it a shot and find a lender that understands the intricacies and realities of business.
“Don’t lose the opportunity,” he stresses. “If you have the right opportunity there, if you see a right return on investment, why not?”
“I think if it worked for me, it can work for anyone else as well.”