Rejected by the banks: SMEs turn to equity crowdfunding after failing to secure business loans
Despite multi-million dollar revenues and massive demand for their product, Jonathan Byrt and Jesse Leeworthy had been refused a business loan by every bank in Australia.
Lenders from all of the big four and even most of the smaller banks took one look at the young company’s lack of securities and shook their heads, leaving the duo hamstrung by a lack of working capital.
“We’ve been unable to meet demand for orders this year due to our working capital issues. I’d say we’ve turned down over $300,000 in orders due to stock outages,” Byrt tells SmartCompany.
The pair run four-year-old water bottle manufacturer memobottle, which has seen success thanks to taking a fresh approach by designing a bottle which can easily fit in bags and backpacks. Also, landing in the Academy Award’s gift bags in 2016 probably helped too.
Byrt said it costs the company about $500,000 to do a full production run for its products, and to drum up that level of capital the business needs to sell out almost all of its inventory, resulting in stocking issues. Read more
Dominic Powell - SmartCompany - 28 November 2018