Client: Sanikleen Group
Since buying mid-sized Victorian cleaning business Sanikleen Group in 2017, a motivated trio with no prior industry experience have transformed it into a dominant national player in the heavily audited world of food production hygiene, increasing both revenue and headcount by around 500 per cent.
With the aid of a ScotPac invoice finance facility, Sanikleen’s new owners made a strategic acquisition in Queensland in the first six month of running the business. A string of new contracts followed, including one of the largest smallgood production facilities in the southern hemisphere, and several other major beef and poultry producers.
Five years on and with ScotPac still in its corner, Sanikleen today employs around 1,200 people and is a global leader in the use of advanced biotechnology to clean large-scale food processing facilities like abattoirs and cool rooms.
Removing cashflow as a barrier to growth
Jacob Bush is Sanikleen’s Chief Financial Officer and one of the original shareholders from 2017. He said that soon after purchasing the business, he and his partners identified invoice finance as the next component needed to fund growth.
‘We quickly came to realise there is no substitute for the immediate access to working capital that you get with invoice finance.
‘The cash flow ScotPac provided us with allowed us to take on new contracts when the opportunities were there, rather than having to wait months for capital to be available.
‘For example, if you take on a $5 million contract there might be start-up costs of $200,000, and potentially two to three rounds of wages and other items like super and payroll tax to pay before you receive any cash from your customer.
‘Without invoice financing that would be very tricky. But having a facility that pays 80 per cent of the invoice value upfront removes those cash flow concerns.
‘Our growth would have been much slower without ScotPac because if we had to tap into internal funds we would have had to pause or sacrifice other parts of the business.
‘As long you are budgeting your jobs correctly and running them efficiently, invoice financing can help you scale infinitely.’
Our growth would have been much slower without ScotPac…, invoice financing can help you scale infinitely
‘Tight window’ a good fit for ScotPac
Daniel Crozier, Sanikleen’s Managing Director looked at a few options before deciding to partner with ScotPac.
‘The main reason we went with ScotPac in the end was the surety the business development managers provided that the finance would be available when we needed to start running and growing the business. That was the most important thing for us.
‘We had a very tight window, and the banks didn’t fill us with confidence that they could deliver on time. ScotPac gave us the assurance they could get the job done, and they did.’
In addition to invoice finance, Sanikleen also has an asset finance facility with ScotPac to keep pace with its need to reinvest to meet service delivery needs.
‘All of our motor vehicle fleet is now funded through ScotPac,’ Daniel said.
‘Again, we looked around, but ultimately it was simpler to keep all our finance under the one roof, and ScotPac made it easy to access the funds we needed.’
Future looks clean and bright
Sanikleen’s rapid growth in Queensland has translated to success in other markets, with the company’s revenue doubling in the past 18 months to now approaching $50 million per annum.
Daniel said the most challenging parts of growing the business so quickly were finding the right people and scaling internal systems to keep pace with the increased load. But there is no thought of slowing down.
‘We now have a handful of the best commercial food cleaning contracts in the country and some great keystone customers like Primo and Inghams,’ Daniel said.
‘Those relationships and the networks they bring have led to more and more opportunities.
‘Having good customers that you know will pay on time makes planning future growth a lot easier.
‘We think growth could really be anything going forward. and having Scotpac as a finance partner is part of that plan.’
ScotPac is Australasia’s largest specialist working capital provider, helping thousands of business owners with the working capital they need to succeed. From start-ups to SMEs with revenues of more than $1 billion, we have the experience, the breadth of product and the personalised service to help more businesses in more situations than any other non-bank lender.