When George Miller began importing and supplying coffee machines from Europe to businesses in Australia, he needed some finance to get him up and running. Here, he explains how Tim Werner, commercial broker and managing director at Finance Logic, helped him do it.
Company Name: Tiger Coffee
Industry: Food service equipment supply
CEO: George Miller
Operating since: 2008
Broker: Tim Werner, Finance Logic
What does your company do?
Tiger Coffee imports and sells/maintains fully automatic, Swiss-made coffee machines.
We have around 1,500 across the country and another 500 or so in New Zealand. We supply a lot of machines to Coles supermarkets.
How did you find your broker?
We were using local chartered accountants were who were accountants and advisers and Tim was in contact with them with other sorts of deals. They did a cross referral, so we met him about 2012.
What did you need finance for?
Tim has assisted us with the finance and the planning of 750 machines. They each cost about $9,000, so we’re talking about $6.7 million over two years.
We were in a situation where we had bought about five container-loads of machines from the supplier, 50 per cent of which was upfront, which we obtained from the customer (four months advanced rental) so that was self-funding. That made a big difference. But we then couldn't raise any rent until month five, so we were looking at a shortfall, because we had to pay the supplier within 60 days.
So, that second tranche we paid to the supplier had to be funded. That’s where Tim came in. He found us a short-term, 18-month bank loan. A straight loan, not asset finance. It had a rate of about 7.12 per cent — which was good in those days.
How did the loan help your business?
It enabled us to carry on with the remainder of the business, and it gave us breathing space to push and grow, and at the same time manage a big account (Coles). That enabled us to spread our wings, talk to other majors and see what else is going on. We’re in talks with Shell petrol stations at the moment, and we couldn’t have done that without being secure.
How was your experience using a broker?
Tim is very diligent, he's pretty experienced with regard to different finance types that are available and he is also very good at presenting the numbers to a banking team so they can get their heads around it very quickly and understand where it is all coming from.
I would use a broker for a mortgage if I needed one. I know people who have used Tim for mortgages and he's excellent on that sort of thing. We've used him for all of our vehicle finance. I know we’re getting competitive rates too — you can trust what he's putting in front of you.
What advice would you have for other brokers working with SMEs?
I think the key thing is to understand what their specific goals and passions are. Then you’re in a position to almost get past the skin of the business to see what the thinking and breathing is. That can enable you to present the right finance terms that are tailored to meet their requirements and what they are capable of doing and providing.
Would you ever use other channels for finance (i.e. online or banks)?
I would never do it online. I think you need to have a much closer working relationship with the type of money we'd be talking about. Anything over a million dollars, you don’t want to be doing that online; you need to see who you are borrowing from, and know them, and know that they are behind you and thoroughly understand what you're getting into.
I have worked with plenty of banks before (for business finance), in the UK. I worked very closely with Royal Bank of Scotland (RBS) over many years. Back when we started working with RBS over there we went from a turnover of £7 million to now over £100 million.
But here in Australia, I'm happy with Tim. He's good.
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