Loan Description

Background

The Borrower is a small Australian company that specialises in truck design, manufacture, assembly for the mining and construction industry worldwide. The new truck is a complementary innovated product to off-highway and articulated trucks that were designed for specific applications.

The Borrower is seeking to establish a ~$5m vendor finance facility in order to manufacture the innovative trucks with customer rental contracts secured. To date 2 prototypes of the trucks have been built and tested in the field.

The product is being discussed with several prospective purchasers and has received positive feedback. Since two significant companies have seen fit to invest in the prototypes it exhibits a strong indication there is substantial demand for the product once developed fully and tested.

The founder has 25 years’ experience in haulage, product development and application experience and has previously founded and sold another similar business in the past.

Loan Amount

~$5 million to be drawn over 12 months with each new customer contract executed

Loan Type

Vendor finance or equipment leasing facility / Asset Backed Financing

Term of Loan

Depending on structure, 2 to 3 years loan terms.

Use of Funds

Manufacturing cost of the trucks. Cost price of each unit is $600k plus GST.

Description of Product

The product to be leased by the Borrower to its customers is a uniquely off-road haulage trucks.Their new off-highway truck model has significant benefits in the target market of the mining, construction and oil and gas industries. The development transpired after years of research into operating costs and listening to miners and contractor’s issues with their haulage fleets. The design scope was to offer a chassis, axles and suspension platform with manoeuvrability and flexibility in various conditions and applications in off-highway production haulage and support applications. Primary design criteria included:

• complete range of body and trailer options to suit various products with payload capacity between 40 and 120 tonne;
• vehicle dimensions and a turning radius to operate on haul roads with restricted widths and poor alignment;
• designed specifically to haul efficiently up to 40 kilometres;
• sufficient power, traction and braking the haul safely up or down grades of 18%;
• lower operating costs through efficiency when compared to similar payload capacity trucks resulting in a lower cost per tonne haulage;
• a robust design fully suited for operation in off-highway mining-type environments;
• designed for less and easier maintenance than modified on-highway, ODT and ADT trucks.

This product has had over 3 plus years of development. A competitor to copy the design would have to challenge the patent and require a similar development time.

Repayment Profile

Customer contracts which have been executed have repayments of $15,465 per month with purchase options available to the customers of $350k plus GST after 24 months.

Collateral

Completed trucks, guarantee provided by the manufacturer and rental stream of income of customers.

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