CASE STUDY: Funding a NSW "Return and Earn" Recycling Business

A warehouse owner in Western Sydney identified an opportunity to establish a recycling business operating under the NSW Government’s Return and Earn container deposit scheme (https://returnandearn.org.au/).

The business model involved installing automated collection machines at eight high-traffic public locations, aggregating containers at an owned warehouse, and operating as an approved participant within the scheme network.

To establish the business, the owner sought funding to purchase equipment, cover operating costs, and secure lease obligations for public-facing collection points, leveraging equity in the warehouse.

RETURN AND EARN NSW

The Business Challenge

Starting this business required significant upfront investment. Each site needed an automated reverse vending machine, installation, and operational setup.

Key challenges included:

• High capital outlay for eight machines and supporting infrastructure

• Lease costs at high-traffic locations averaging $60,000 per site per year

• Transport, staffing, and warehouse operations before meaningful cash flow was generated

Profitability would depend on reaching sufficient container volumes, efficient logistics, and strict compliance with the Return and Earn scheme.

Short-term or unsecured business lending was not well suited to the asset-heavy, infrastructure-led nature of the project, particularly given the regulatory framework governing the scheme.

The Funding Solution

The owner used equity in their industrial warehouse to refinance an existing mortgage and raise approximately $800,000 in funding.

The funds were applied toward:

• Acquisition of eight automated collection machines

• Installation, electrical works, and commissioning

• Warehouse handling equipment and logistics setup

• Initial working capital to support staffing, transport, insurance, and site lease commitments

  
  

The loan was structured over a longer term aligned with the warehouse and equipment life, providing predictable repayments and funding stability during the rollout phase.

Potential Benefits

At scale, the eight collection sites were assumed to process approximately 4.8 million containers per year in aggregate, based on location traffic and machine capacity.

Revenue generation was linked to container volumes processed within the Return and Earn framework, subject to ongoing compliance and participation requirements.

By leveraging existing property equity rather than relying on short-term facilities, the owner was able to:

• Deploy multiple collection sites simultaneously

• Secure sufficient funding for infrastructure and working capital

• Align funding structure with the long-term nature of the assets

• Operate within a government-regulated scheme with appropriate financial buffers

This structure allows the business to scale efficiently, manage cash flow during ramp-up, and operate fully within the Return and Earn compliance framework. By using warehouse property-backed funding rather than unsecured financing, the business can establish multiple collection points simultaneously and build a foundation for sustainable growth.

Funding a Recycling Business

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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.