HEGS Australia* is the South Australian-based manufacturer of ‘HEGS’, the innovative pegs with hooks that allow clothing to dry without marks.
HEGS help to maximise hanging space, have an ergonomic grip for ease of use and a grip lock system that holds washing taut, keeping washing secure on the clothesline and reducing the need for ironing.
In Australia, HEGS are sold through major retailers such as Woolworths, Big W, Harvey Norman and The Good Guys.
As part of its export growth strategy, HEGS Australia holds international patents for its innovative peg, and now has distributors in the United States, Canada, Mexico, South Africa, England, Scotland, Ireland and China.
HEGS have received several design awards, including the 2014 International Good Design Award and the 2014 Design Institute of Australia’s Gold Design Award.
A funding gap
HEGS Australia needed to increase its production capacity after winning three large export contracts into South Africa, China and the US.
In the HEGS production cycle, there is often a delay between when HEGS Australia pays its suppliers to produce HEGS, and when revenue is received from buyers.
This financing gap can be up to three weeks, which puts significant pressure on cash flow and makes it difficult to increase production to fulfil large new orders.
While HEGS Australia’s bank has been supportive of its new export contracts, it was unable to approve the additional working capital needed, due to insufficient tangible security.
How we helped
We provided HEGS Australia’s bank with a A$250,000 Export Working Capital Guarantee, which allowed it to provide the additional working capital HEGS Australia needed to cover the upfront manufacturing and pre-shipment costs for the three new export contracts.
Being able to fulfil such large orders helps to enhance HEGS Australia’s reputation with overseas distributors for quality and reliability, and allows it to continue with its overseas expansion.