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