A childcare centre with ambitious long-term expansion plans feared it would have to abandon its vision after struggling to secure funding to achieve this growth.

With a complex multi-operator business structure and more than 12 childcare centres – each with multiple corporate entities and directors – the plan to grow to more than 30 centres within 7 to 10 years required a significant amount of money in one loan. And without the help of Ligo Finance, it may have been an impossible task.

Before reaching out to Ligo Finance, the business had been using cash to fund its growth. But as its expansion plans involved new acquisitions or the purchase or construction of properties, this strategy was no longer sustainable.

Even though the business sought to secure bank finance using its existing childcare equity, it was unable to obtain a mortgage over lease from multiple landlords, which lenders required as security against the loan.

Ligo Finance was able to overcome this problem by taking the time to understand the client’s security structure, as well as the flow of funds that could be used to service their future debt. We separated the client’s business serviceability from their other asset interests and liability position, and used their projected income to improve their borrowing capacity and attain funding up to 70% of the goodwill business value.

Through their efforts, Ligo Finance successfully attained a funding line of $11 million to support the business’ future growth.

This finance solution also came with additional benefits, including:

  • A term loan with a redraw facility
  • An interest-only structure to help the business manage its cash flow during its growth period
  • No restriction on how the funds were used, as long as they served commercial purposes
  • A bank guarantee limit which allowed the business to recover funds previously held in term deposits
If you’re looking to secure finance for your childcare centre, Ligo Finance can help, no matter how complex your needs may be. Reach out to us on 02 8357 1700 for expert, yet personalised, advice.