CASE STUDY: Expansion Funding to Grow a Leading Commercial Food Machinery Business
- Commercial Finance Advisor
- Oct 17, 2025
- 3 min read
Updated: Jan 2
A well-known Australian commercial food machinery manufacturer has been operating for over 20 years and needs funds to manage overseas production, scale inventory, and expand domestically and internationally. The business designs its own machinery, manufactures overseas, and sells to customers across Australia and overseas. Demand was strong, profits were healthy, but growth was starting to put pressure on cash flow.
The owner wanted to keep expanding without constantly worrying about running short of cash.
The business has been trading for decades and is a dominant player in the specialist barbeque equipment market.
The business designs and manufactures proprietary machinery in China and distributes across Australia, New Zealand, and Asia-Pacific. The business exhibited strong cash flow, high stock turnover, and attractive margins.
The Business Challenge
The business generates around $9 million in annual revenue, with net profits of approximately $1.8 million. Inventory held in Australia averages about $900,000 at any given time.
Despite being profitable, the business experienced cash flow pressure that is common for growing manufacturers that imports from overseas:
Upfront supplier payments: Full container loads from China are required for cost efficiency, tying up significant capital.
Inventory funding: Maintaining stock in Australia to meet demand creates ongoing working capital needs.
Expansion ambitions: Growth opportunities in domestic and international markets are limited without dedicated funding.
Owner dependency: Operational knowledge is concentrated with the founder, constraining scalability.
Marketing gaps: Limited formal campaigns restrict customer acquisition, despite strong brand recognition.
The Funding Solution
Rather than using one large loan, the business explored a structured finance solution, with different funding products used for different needs.
Trade Finance (secured under the Personal Property Securities Register)
A trade finance facility funded manufacturing and shipping costs from China. Security was taken over the imported inventory under the Personal Property Securities Register (PPSR). As stock arrived and was sold, the facility was repaid, allowing the business to continue ordering full container loads without tying up cash.
Revolving Working Capital Line (secured by a General Security Agreement)
A revolving working capital facility supported inventory in Australia, payroll, and day-to-day operations. The lender took a General Security Agreement (GSA) over the business, covering assets such as inventory, receivables, and bank accounts. The limit was structured to scale as revenue and stock levels increased.
Growth Funding (term loan under GSA)
A medium-term loan over 3 years provided funding for sales staff, marketing, and international distributor expansion. This was secured under the existing GSA and structured with repayments aligned to cash flow as growth initiatives took effect.
Future Refinance Pathway
Once operations stabilised and earnings strengthened, the business would be well positioned to refinance into lower-cost major bank funding, supported by improved scale, management depth, and financial performance.
Potential Benefits
Smooth funding of overseas production without delays, sustained inventory to meet customer demand, accelerated domestic and international growth, reduced reliance on the owner, and clear access to future lower-cost bank finance.
Why This Works
This approach ensures that cash is available when it’s most needed such as covering overseas production, shipping, and domestic operations, but without straining the business owner’s existing resources.
Putting this type of funding structure together isn’t about finding “a loan.” It’s about understanding how the business works and matching the right lenders to each part of the operation.
A finance broker helps:
Choose lenders who understand manufacturing and imports
Structure facilities that work together, not against each other
Avoid using personal property unless necessary
Plan for cheaper funding as the business grows
Considering funding for a business or investment?
Explore practical funding options and speak with a specialist who understands commercial and investment finance.
DISCLAIMER: This case study is illustrative only and may be hypothetical or partially fictitious. Details may be modified to preserve confidentiality and should not be relied upon as a representation of any actual client outcome. Finance options are subject to individual lender credit criteria, approval, and applicable terms and conditions. This content is general information only and does not constitute financial, legal, tax, or accounting advice. Our firm provides business consulting and finance broking services only and recommends that readers seek independent professional advice tailored to their specific circumstances.
