CASE STUDY: Funding to Grow & Protect Profits for a Furniture Business
- Commercial Finance Advisor
- Aug 8, 2025
- 3 min read
An established Sydney furniture business sought funding to grow, cover upfront overseas manufacturing costs, manage foreign exchange risk, and expand delivery capacity with two new trucks.
Multiple tailored finance facilities helped align repayments with sales, maintain cash flow, and support growth, allowing the business to operate efficiently while scaling operations and protecting profit margins.
The Business Challenge
The business runs two retail showrooms selling directly to consumers, alongside a wholesale division supplying over 20 retailers across Australia. Their core products are custom-made lounges, complemented by mattresses and other furniture.
Lounges are manufactured in China and Vietnam and are made-to-order, with customers typically paying a 50% deposit upfront and the balance upon delivery, usually 4 to 12 weeks later.
The business generates annual turnover of $5–6M, with net earnings around $1.5M.
Despite strong sales and a loyal customer base, the business faced cash flow pressures:
Significant upfront payments were required for overseas manufacturers.
Foreign exchange fluctuations could erode profit margins.
Expanding delivery capacity required additional trucks, but cash reserves were limited.
Timing gaps between customer deposits, supplier payments, and operational expenses created temporary liquidity constraints.
The business owner sought funding to:
Cover upfront payments to overseas manufacturers.
Mitigate foreign exchange risk.
Purchase two additional trucks to expand delivery capacity.
The Funding Solution
A combination of specialist finance solutions was recommended:
Trade Finance / Inventory Funding: Covers upfront payments to overseas manufacturers in their currency, allowing the business to hedge FX risk and align repayment with customer deposits. Loan term typically aligned with the production and shipping cycle (4–12 weeks). Repayments structured to match incoming customer deposits, keeping cash flow balanced.
Working Capital Line: Provides a flexible buffer for ongoing operations, including marketing, payroll, and short-term cash flow needs. Working capital revolving limit of approximately $200,000–$500,000 depending on lender and business history. Interest-only repayments while funds are drawn and can be reused as invoices are settled.
Asset Finance for Vehicles: Secures funding for two new trucks with typical loan term of 3 to 5 years and structured monthly repayments. Helps to preserves cash reserves while expanding delivery capacity.
The funding was structured to align with the business cycle: supplier payments matched by deposits from retail and wholesale customers, FX exposure hedged via forward contracts, and asset finance repayments spread over 3–5 years.
Potential Benefits
By accessing a combination of trade finance, working capital, and asset finance, the business can ensure suppliers are paid on time, avoiding any production delays and keeping custom orders on schedule.
Why This Works
Currency risks are managed, helping to protect profit margins on imported goods.
Expanding delivery capacity with new trucks supports growing order volumes, while flexible working capital allows the business to cover operational costs, marketing, and payroll without tying up deposits or revenue.
Structured repayments aligned with sales and customer deposits reduce cash flow pressure, enabling predictable operations and sustainable growth.
Considering funding for a business or investment?
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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.
