CASE STUDY: Ribs and Roast expands using debtor finance

When Ribs and Roast realised they were outgrowing their factory and having to turn away orders, they committed to an ambitious expansion plan.

Cooked meats specialist, Ribs and Roast services major steakhouses across the country, and also have retail lines with some of our major retail giants.

General Manager, Ryan O’Shea, said by 2013 the business was struggling to keep up with orders due to the size of their Sydney factory (300-400 square metres).

"We were getting so much interest in our products, it was very frustrating having to turn down business due to our limited capacity," he said.

"Our broker referred us to Scottish Pacific and their debtor finance facility allowed us to have peace of mind around cash flow while we transitioned to a bigger factory."

O’Shea said their broker referred them to a debtor finance facility, which allowed the business to cope during a period of great growth – an estimated 50 percent to 60 percent growth month on month for the business, which has been trading for about six years.

The business continues to grow thanks to the new factory, where space has more than quadrupled to 1500 square metres.

"Debtor finance allowed us to buy better – we had to purchase a lot of raw materials to enable us to service new clients, knowing that we wouldn't see the money for some time from these clients, so we needed the facility to help us," O'Shea said.

"We have now established great relationships with our new clients and our margins are higher due to the expansion and being able to produce to scale."

Debtor finance is a line of credit secured against accounts receivable. Also known as invoice finance, factoring, cashflow finance and invoice discounting, it provides access to working capital that would otherwise be tied up in receivables for 30 or 60 days or more. There are currently more than 4500 Australian SMEs, with combined annual revenues of $65 billion, using debtor finance.


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