Case study: challenges in business expansion

Case study

The brief

The client owned a small commercial and general insurance broking business, operating from one state. He needed capital to expand nationally.

The challenge

With aspirations to expand nationally, the client hired a senior business development manager to drive new business acquisition. To finance the cash flow gap until the manager was generating revenue the client asked Macquarie for a cash flow loan. A loan was advanced by Macquarie secured by the projected earnings of the client’s business as Macquarie understood:

  • the goodwill inherent in the client’s business
  • the expansion plan’s potential benefits to the client
  • business valuations in the insurance broking industry.

Macquarie’s relationship manager worked closely with the client when they reassessed their options and decided to scale back their expansion plans to focus on the existing business.

The Macquarie difference

With industry knowledge, Macquarie ascribed a value to the client’s portfolio of insurance clientele and also provided a property-backed loan. For Macquarie the client’s portfolio of insurance clients was not just an intangible asset or goodwill, but reflected a future earnings stream and a valuable asset.

The client didn’t have to face lengthy loan applications and could explain his progress directly to his relationship manager.

The outcome

During the expansion and the consolidation the client benefited by having:

  • 'on call' access to his relationship manager
  • a single, consistent point of contact for approvals
  • access to bespoke financial accommodation to smooth cash flows
  • a relationship with a business bank that understood the value in his business.

The client didn’t have to face lengthy loan applications because of the convenient access he had to his relationship manager. The client is now profitable and is reassessing other opportunities for expansion.

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The case studies and examples provided on this page are based on actual de-identified client circumstances. They have been included for illustrative purposes only, without taking into account any individual's personal objectives, financial situation or needs.

The information on this page has been prepared by Macquarie Bank Limited ABN 46 008 583 542 (AFSL and Australian Credit Licence 237502) and does not take into account your objectives, financial situation or needs. Before making any financial investment decision or a decision about whether to acquire a financial, credit or lending product, a person should obtain and review the terms and conditions relating to that product and also seek independent financial, legal and taxation advice. All applications are subject to Macquarie’s standard credit approval criteria. This information is intended for recipients in Australia only.

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