The Clean Yes
HIGHVIEW, FROM THE MD'S CHAIR
// THE SETUP
You run Highview, eleven years old, precision sheet-metal and engineered components out of Hamilton. Two three-year supply agreements took revenue from US$28m to US$38m, and the capacity to serve them was funded last year with a term loan that is amortising on schedule. Ten days ago you asked the bank for US$1.5m more on the working capital revolver, US$2.5m to US$4.0m, for the receivables and stock the contracted volume carries. You asked for the number the cycle arithmetic gave you, slightly under it if anything, and you said you would like an answer inside two weeks because the second agreement steps up next quarter.
The answer came in eight days. Yes, as asked, in full. No borrowing base. No monthly aged debtors. No tightened covenant package. Annual review, as before. The relationship manager said the file read cleanly and the committee did not want to spend structure on a client who had not earned any.
Your finance manager is pleased and slightly suspicious. Your operations manager wants to know if the line is available now. You have a step-up to deliver, a term loan to service, and a bank that has just told you, in the plainest way it has, that it read your file with judgment rather than with a template.
No conditions, no pack, no questions. What does a borrower do with a clean yes?
Healthy NZ precision manufacturers run DSO 40–50 days and positive operating cash flow. The approval you hold was written against that file. So will the next one be.