Since 1974, Promo Gear has been producing corporate gifts, clothing and uniforms – “Anything with a logo,” says Director David Hulett.
Based in Brisbane, Promo Gear has customers and suppliers across Australia and around the world. The business has been growing fast, nearly doubling turnover this year. Yet that growth has brought new challenges – including the need to access working capital rapidly when orders come flooding in.
Financing growth with flexibility
David says the last 18 months have seen enormous demand for personal protective equipment, face masks, sanitiser and related products. Promo Gear was ahead of the market in anticipating the need for rapid antigen test (RAT) kits, locking in suppliers before demand spiked. And as corporate events and promotions have resumed, the business has also seen more traditional product lines pick up.
With an influx of larger clients bringing in larger contracts, the business needed to act quickly to secure working capital to fund its growth.
“Some of the largest purchases that were happening over the last 12 to 18 months required payment upfront,” says David. “A lot of the federal government departments don't actually pay deposits. So we were self-funding all of our processes with deposit payments through cash flow.” When demand for RAT kits jumped, the business also needed quick finance to secure an ongoing supply.
At first, David and his team tried using procurement loans to fund purchases. Yet that didn’t give them the flexibility they needed to respond rapidly to new opportunities.
“We found that the process of approval for procurement loans could take six weeks, while in some cases we were delivering [products to customers] in three,” David says. The lengthy application process for each loan was also a significant pain point, along with the uncertainty of not knowing whether the business would have approved finance on time.
“We’re big planners,” says David. “We love structure and process. So once we actually realised that the organic growth of the business was almost out of our control, we needed peace of mind to know that we can basically flow through the growth comfortably, and have the support behind us to be able to do that.”
That was when their Business Banker suggested a solution. “He pointed us towards Stream Working Capital, which was the best thing that could have happened to us,” says David.