Bacco’s Bakery is a quaint, family-owned Italian bakery located in the heart of Wickham, New South Wales. Established in 2001 by Luigi and Kristy Papagni, passionate bakers with over 20 years of experience, the bakery quickly became a local favorite. Specializing in sweet & savoury snacks, and custom cakes, Bacco’s Bakery prides itself on using only the finest ingredients and traditional baking techniques.
Despite its popularity, Bacco’s Bakeries faced significant financial challenges due to a series of unexpected events. A major renovation project in 2018 and the impact of the COVID-19 pandemic led to a strained cash flow and mounting debt. Bacco’s credit score suffered drastically, plummeting to a level where banks were unwilling to offer any form of financial assistance.
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SOX compliance in Settlement process automation
Success rate of bot case completion
For functional release of OBT, RTS and OGS
The Chalange
Bacco’s Bakeries was in dire need of funds to keep the business afloat. The bakery needed to pay off outstanding debts, invest in new equipment, and cover operational costs to continue serving its loyal customer base in New South Wales. However, Bacco’s poor credit score, resulting from missed payments and a high debt-to-income ratio, made it impossible to secure a loan from lenders. The rejection from multiple banks left Luigi and Kristy disheartened and on the verge of closing their beloved bakery.
What did
Newal Funding do
When Luigi and Kristy reached out to us, we stepped in at this critical juncture. Understanding the unique challenges faced by small businesses with bad credit, Newal Funding offered Bacco’s Bakeries a guaranteed approval loan. This loan was specifically designed for businesses like Bacco’s Bakeries that had been turned away by lenders.
The loan provided was a $90,000 working capital loan with flexible repayment terms. What set this loan apart was its tailored approach: lower initial payments to accommodate Luigi and Kristy’s current cash flow situation, and a fixed interest rate to provide certainty in financial planning. Additionally, we offered financial counseling as part of the package, helping Luigi and Kristy manage their finances more effectively moving forward.
Implementation
With the funds received, Luigi and Kristy implemented a strategic plan to stabilize and grow their bakery. The steps included:
- Debt Consolidation: Luigi used part of the loan to pay off high-interest debts, significantly reducing their monthly financial burden.
- Equipment Upgrade: Investing in new, energy-efficient ovens and mixers improved productivity and reduced utility costs.
- Operational Costs: Covering rent, utilities, and employee wages ensured the bakery could operate smoothly without interruption.
- Marketing Campaign: Launching a social media and local advertising campaign to attract new customers and boost sales.
Newal Funding Group’s financial counselors also worked closely with Luigi and Kristy to create a budget and financial plan, ensuring the loan was utilised effectively and repayments were manageable.
The Results
- Increased Sales: The marketing campaign successfully drew new customers, increasing monthly sales by 30%.
- Improved Cash Flow: Debt consolidation and new equipment reduced overhead costs, resulting in positive cash flow within six months.
- Financial Stability: Bella's credit score improved as she made consistent loan repayments and cleared old debts.
- Business Growth: The bakery was able to expand its product line and introduced a popular online ordering system, increasing revenue streams.
