An established family-owned childcare group operating across Victoria approached Ligo Finance looking to improve cash flow and prepare for future growth.

The business had accumulated significant cash reserves tied up in term deposits that were being used to secure bank guarantees for landlords. At the same time, the owners wanted to repay director shareholder loans and simplify their banking arrangements.

Like many operators, they believed cash-backed bank guarantees were the only option available, limiting their access to capital and reducing flexibility within the business.

Ligo conducted a comprehensive review of the group's existing banking structure and identified opportunities to unlock capital while improving overall funding efficiency.

Working with a major lender, we refinanced approximately $600,000 of existing debt, arranged an additional $750,000 to repay shareholder loans, and established a $657,000 bank guarantee facility secured against the business rather than cash term deposits.

This structure allowed our client to:

  • Consolidate lending facilities with one banking partner
  • Replace cash-secured bank guarantees
  • Release capital previously locked in term deposits
  • Improve cash flow flexibility
  • Reduce repayment pressure through interest-only lending structure

The restructure immediately improved liquidity across the group and returned significant capital back to both the business and its shareholders.

With stronger cash flow and a more efficient banking structure, the client was able to continue executing on its pipeline of childcare centres. Ligo also arranged the associated bank guarantee requirements, ensuring the business had the funding framework needed to support continued expansion.

The result was a more scalable financial structure that reduced banking complexity and gave the owners greater confidence to pursue future growth opportunities

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