The challenge

 An experienced childcare operator with more than 30 years in the early childhood education sector had a clear vision: to develop a purpose-built, 125-place childcare centre in Sydney.

Having successfully established 10 childcare centre developments over their career, the client had the expertise and industry knowledge to deliver another high-quality service. However, securing funding presented a challenge.

The client needed funding to start, there was no established trading history or cash flow. While the client held substantial equity in unencumbered property, they required 100% funding for the fitout and establishment costs of the new centre, along with support for rental bond requirements.

Traditional funding options often struggle to accommodate projects that rely on future earnings rather than existing business performance.

The solution

Ligo Finance worked closely with the client to structure a funding solution that reflected both their extensive track record and the future earning potential of the new centre.

The funding package included:

  • A $1.8 million fitout term loan covering 100% of fitout and setup costs
  • Capitalised interest for seven months, providing  breathing room during the three-month construction period, service  approval process and initial occupancy ramp-up
  • A bank guarantee facility to cover the rental bond requirements
  • Lending structured around the maintainable earnings of the new childcare business rather than existing cash flow.

The facilities were ultimately funded through a major Australian bank, supported by the client's strong industry experience and available property security.

The outcome

With funding in place, the client was able to proceed with the complete fitout and launch of their new childcare centre without drawing heavily on their cash reserves.

The financing solution provided the flexibility needed to complete construction, obtain service approvals and focus on building occupancy during the crucial early stages of operation.

Most importantly, the client achieved a long-held ambition of creating a high-quality early learning environment designed to foster children's curiosity, learning and development through innovative facilities, experiences and educational programs.

By leveraging the client's proven track record and future business potential, Ligo Finance helped turn a vision for growth into a thriving new childcare centre.