Your client’s $4M business just got declined. The numbers work. The strategy’s sound. But the EBITDA presentation doesn’t fit the bank’s template. Now what?
A privately owned Australian business was exploring a growth opportunity through acquisition.
From an advisory perspective, the fundamentals were sound:
- Approximately $4M in annual revenue
- Consistently profitable
- Experienced management
- A clear strategic rationale for expansion
Despite this, traditional lenders declined to participate – not because the business was distressed, but because the opportunity didn’t fit neatly within bank credit policy.
The business had strong cash flow but an unconventional EBITDA presentation. Where banks saw a reporting issue that violated policy, the commercial reality was a business fully capable of servicing the debt.
A Familiar Scenario for Financial Planners
For many financial planners, this situation is increasingly common.
Clients may be growing quickly, reinvesting heavily, or pursuing strategic opportunities that make commercial sense — yet fall outside the narrow parameters of traditional bank lending.
For the business owner, it was frustrating. For their adviser, it meant watching a viable opportunity stall for reasons that had nothing to do with credit risk.
Looking Beyond Policy
When the business was referred to NoBnk, the assessment approach shifted.
Rather than starting with policy compliance, the focus was on:
• Commercial viability of the opportunity
• Management capability and track record
• Cash-flow sustainability
• Identifiable and manageable risk
The funding solution was structured to reflect the commercial reality of the business — prioritising substance, security, and execution over standardised ratios. This allowed the client to proceed without restructuring the business simply to satisfy bank policy.
The Outcome
The acquisition proceeded.
The client maintained momentum and executed their growth strategy as planned.
For the adviser involved, the value was not transactional – it was reputational. The client received a solution aligned with commercial reality rather than a recycled decline.
What This Means for You
Watch for these triggers that signal your client needs alternative finance, not another bank application:
- They’ve been “pre-qualified” or “informally approved” multiple times, but formal approval never comes
- Strong cash flow, but their EBITDA presentation doesn’t satisfy banking templates
- The opportunity is time-sensitive and bank timelines don’t match deal timelines
- They’re reinvesting profits aggressively (smart for growth, problematic for bank ratios)
- The security is non-traditional but commercially sound
Alternative finance is not a replacement for banks. It is a complementary option when policy becomes a constraint rather than a safeguard.
For financial planners, understanding when alternative capital belongs in the conversation can help ensure clients are supported — even when traditional lenders cannot participate.
Got a Client Stuck in Bank Purgatory?
We’re happy to provide a second opinion on whether alternative finance is appropriate for the situation.
Paul Boyd-Skinner | NoBnk Pty Ltd
1300 66 2657 | admin@nobnk.com.au
www.nobnk.com.au
