the client

The client is from a long-standing family butcher from Tasmania. When it came to branching out on his own, the client decided to stay in meat and to build up a new business also covering food production. Being passionate about quality is central to the business which he hopes will win many clients away from the supermarkets and build a loyal customer base.

the challenge

Our client was looking for $80,000 to buy various food preparation and production items. He approached a broker for advice and help to find a suitable lender. The broker recognised that when starting up a business or trading for less than two years, most lenders view the business as higher risk. So whatever your ideas and business plan, turning ideas into reality can be hard. The second challenge that was identified is looking for a loan to buy food production items such as cookers, stainless steel work surfaces and other items are generally viewed as tertiary assets. Many lenders are not willing to consider these types of assets due to challenges on valuation and resale.

The broker contacted their local thornmoney Business Development Manager, Andy Cusworth to discuss the deal and work out a solution.

the solution – funding for food production assets

Andy workshopped the deal with the thornmoney credit team. The asset risk was solved by splitting the application down and analyzing all the different assets. This revealed that some of the equipment were classified as secondary, and some tertiary. The best approach was therefore to split into two loans or chattel mortgages requiring the supplier to split into two invoices. This solution also solved the limits that thornmoney applies to businesses who have been trading for less than 2 years. As an added bonus the additional flexibility enabled the client to chose one loan to be paid in advance and the other in arrears, all helping his cashflow.

thornmoney asset finance tailored to small business owners

The combination of working with the broker, sales and credit has been a winning one for this client. He now has the finance to fulfil his food production and diversification plans. When there’s a range of equipment needed for food production or manufacturing, thornmoney will look consider a wide range of items. Being a newer business is not a deterrent either as we look at the knowledge and experience of the owner. Each business is different and for Simon and the broker, this tailored solution gets the thumbs up!