Knog is a Victorian-based urban cycling accessories company that designs, markets and delivers urban cycling accessories, including lights, locks, cycle computers, bags, gloves, clothing, leather goods and bike tools.
It exports these accessories to over 40 countries through a network of distributors.
When Knog experienced increasing demand for its innovative products, it needed additional cash flow to fulfil its distributors’ orders.
As demand for Knog’s products in North America, Europe and Asia grew, the size of distributors’ orders increased, as did requests for payment terms to be up to 60 days, rather than full payment on shipping.
Suppliers also asked for more favourable credit terms as Knog’s orders became a larger part of their business.
“The mismatch between when we have to pay our suppliers and when we get paid by our distributors is a challenge for us,” said Hugo Davidson, Knog’s CEO.
We provided a US$600,000 export working capital guarantee to Knog’s bank, Westpac, which allowed Westpac to lend this amount to Knog to help ease its cash flow issues and fulfil its distributors’ orders.