The Challenge

John B.* owns a cattle farm and butcher shop, where he sells meat both wholesale and retail. For a number of years, he faced setback after setback. 

First it was the drought, which dealt a blow to his cattle business. With insufficient rain, there wasn’t enough feed for the cows to cycle, so they didn’t get pregnant and there weren’t enough calves on the ground to sell. Even for those cows that did give birth, there wasn’t enough food to fatten up the calves, so he had to feed them hay, sell them at a discounted price, or move them to another location – a costly endeavour. All these challenges hit his cash flow immediately.

Then there was the butcher shop. He’d already invested half a million dollars to set up the business: renovating the building, lining the walls with chiller panels and installing chiller units and freezers. It was a big undertaking, but he knew what he was doing; the shop was in a semi-rural area with a burgeoning population.

But it would take time to grow the business. He needed to build up a client base and do some solid marketing to gain an edge on the competition. All the while, the expenses remained: staff, stock, bills.

Then COVID hit, along with a series of lockdowns that forced him to temporarily shut up shop. In a business where you buy carcasses, bone them and prepare the meat for sale, you’ve only got a week to sell before they start to dry out in the fridge. 

His business was considered an essential service and could therefore continue operating at some points throughout the lockdowns, but the impact on production was heavy: they worked at a reduced capacity, suffered from high staff turnover, and had to abide by additional regulations like tools down for cleaning every 30 minutes. One snap lockdown came just after the business had purchased about $80,000 worth of carcass meat. It was sitting in the chiller and if they didn't bone and sell it within the week, it would go off.

“The meat game’s pretty ruthless,” says John.

In those early days of the retail and wholesale business, the revenue was not high enough to cover the outgoings. “We were running out of cash flow,” says John. “We could see that if we could hang in there we’d get through the other side, but holding the whole job together to get there was difficult.”

He approached the banks for financial support, but none of them would help.

The Bizcap Difference

Over the course of four years, Bizcap supported John’s business with a series of Small Business Loans to help him get through those cash flow crises.

Bizcap were the only ones who stood up and helped us.

So says John. Every time he ran into trouble, he’d pick up the phone to his dedicated Bizcap Loan Specialist, Ted. “Without him and Bizcap, we wouldn’t have made it, because we couldn’t get anybody else to support us. So I am very grateful for Bizcap being able to assist us.”

“There was never a time when I rang Ted and he wasn’t able to put something together. He could see that every time we contacted him we’d made a bit more progress. He’d pass that on to his lending team and they could see the same thing. Everything we borrowed we paid off – never missed a payment.”

With each loan, John’s businesses got through another six months to a year, using the lump sum of cash to pay off meat bills, freight, wages and other operating costs at the shop. Over at the cattle station, he used the funds to feed the cattle, cover wages and pay for diesel and other running costs.

Each time we got a loan, it would go to the most urgent or the most critical areas.

“It was always just enough to keep us trading,” says John. “It went on like that for a number of loans until eventually we got on top of it and had the cash flow in the retail outlet up enough that we could make ends meet – until we got to a point where we were on our feet.”

John also spoke of the flexibility in his repayment schedule. One time, over Christmas, Ted managed to organise for John’s repayments to be halved when business was lean and doubled when sales were bountiful. “Ted was able to structure the loan to suit our business and keep it going.”

Why did he keep returning to Bizcap over the years? “There were plenty of other [non-bank] lenders ringing to offer us loans, but I had a good relationship with Ted,” John adds. “He saw the picture right from the word ‘go’ and was able to explain it to the Credit team.”

The Outcome

It took John’s retail and wholesale business about five years until it was on its feet. Now, with its customer base built up, COVID lockdowns a thing of the past and a stable workforce of 20 staff, the butcher shop is profitable. With a steady stream of income, John no longer faces cash flow issues and no longer requires Bizcap’s assistance.

John remains grateful for Bizcap’s support during the business’s rocky first years.

Without Bizcap, we wouldn’t be where we are now.

Says John: "At the end of the day, it was expensive taking out loans, but there was no real way around it. Except if we folded and went broke, but that was never an option for us: we were always going to keep trading.”

*Not his real name. The name of the business owner has been changed to protect his privacy.