How Innovate Funding Structured a Growth Solution at 9% With a Non-Bank Loan

When a business has a profitable growth opportunity but the bank won't move fast enough, the cost of inaction often outweighs the cost of short-term private finance. This deal illustrates that dynamic.

The Situation

An established services business in outer metropolitan Sydney was generating $2.4 million in annual revenue with healthy margins. The directors identified an opportunity to acquire a smaller competitor — a deal that would add $800,000 in contracted annual revenue and consolidate market share in their region.

The acquisition price was $650,000, inclusive of plant, equipment, client contracts, and goodwill. The directors had $200,000 in available cash. They needed $450,000 to close the deal.

Why the Bank Couldn't Help

The directors approached their existing bank. The bank was willing to consider the acquisition finance — but the credit process would take 8–10 weeks. The vendor had set a 28-day settlement deadline and had a competing offer from another buyer.

The bank's assessment also required a full business valuation of the target, 12 months of combined financial projections, and a revised serviceability model incorporating the merged entity. None of this could be completed within the settlement timeframe.

The Private Lending Solution

Innovate Funding structured a private first mortgage against commercial premises owned by the directors (valued at $950,000, unencumbered).