Martin Iglesias’ Advice to Growing Mid-Sized Businesses: ‘Don’t Put the Cart Before the Horse’

Mid-sized companies in Australia often face a familiar problem: growing pains. They spot an opportunity, rush to capitalise on it, and only then scramble to secure the funding needed to make it work. It’s a reactive approach that can spell disaster, according to Martin Iglesias, a seasoned credit analyst at Highfield Private with over two decades of experience in corporate banking.

He has simple advice for SMEs who want to grow without burning out. “Don’t put the cart before the horse,” Iglesias says. 

It’s advice born from years of witnessing businesses struggle with cash flow crises, missed opportunities, and strained relationships with lenders—all because they failed to plan their financing strategy before pursuing growth. But being proactive takes more than simply applying for a loan. In a recent interview, Iglesias explained his recommendations for building a financial structure that supports sustainable growth. 

The Corporate Governance Gap

As businesses transition from small enterprises to mid-sized operations, they often overlook a critical component: corporate governance. Iglesias points to what banks call the “Emerging Corporate” segment—businesses that are starting to corporatise as they grow.

“As [companies] corporatise, they start getting layers of management and additional roles within the business to specialise in areas, and as part of this corporatisation, they need to focus on managing their financial situation,” he notes. “Something that a lot of business owners, particularly entrepreneurs and CFOs, disregard.”

The problem is understandable. Business owners are naturally drawn to the exciting aspects of growth—new customers, increased sales, market expansion. But this forward-focused mindset can blind them to the financial foundations that must support their ambitions.

“They look at the sales, and they look at how much they can sell, and the customers, but they don’t look at things from a backward looking perspective historically,” Iglesias observes. “What are their financials like for the past couple of years?”

The Foundation: Financial Health and Tax Compliance

Before any growth initiative begins, Iglesias emphasises that businesses must establish solid financial foundations. This starts with clean, comprehensive financial records that accurately reflect the company’s performance and demonstrate the need for additional funding.

“They need to get their financials in place, and they need to show the performance and reflect the need for that financing as well on the balance sheet,” he explains. “If it doesn’t, then the banks will likely turn them down.”

Perhaps most critically, tax compliance cannot be overlooked. Iglesias has seen promising businesses rejected by lenders simply because of outstanding tax obligations.

“They should not approach a bank for additional funding if their taxes are in arrears,” Iglesias says. “The major banks just won’t consider funding for businesses that are struggling to manage their tax obligations.”

This requirement extends beyond basic compliance. Banks now routinely request Australian Tax Office portal access to verify that businesses are current on all tax obligations, including payroll tax, income tax, and superannuation. Any arrears or payment plans immediately raise red flags.

Understanding the True Cost of Growth

Mid-sized businesses must also grapple with the reality that different funding sources come with different costs—and these costs must be factored into growth projections from the outset.

“If they use an alternative lender, they need to adjust their ROI for a higher cost of debt as well,” Iglesias advises.

This calculation becomes particularly important as businesses consider whether to pursue traditional bank financing or explore alternative lending options. While alternative lenders may offer more flexibility and higher loan-to-value ratios, they typically charge higher interest rates that can significantly impact the profitability of growth initiatives.

The Planning Imperative

For complex growth strategies that go beyond straightforward property purchases or equipment financing, Iglesias stresses the importance of comprehensive cash flow modelling. It’s not the most exciting aspect of business expansion, but it’s essential.

“A lot of business owners do not enjoy this sort of thing. It’s not the fun part to running a business,” he acknowledges.

This resistance to financial planning often leads businesses to seek professional help—whether from financial consultants, advisers, or experienced brokers who can manage these complexities on their behalf.

Real-World Success Stories

Iglesias’ approach to pre-planning has yielded remarkable results. One of his most notable successes involved a bricks-and-mortar white goods retailer that identified an opportunity in online sales. Rather than diving in unprepared, they worked with Iglesias to structure appropriate financing upfront.

“We set up a structured finance solution based on interim management accounts via international trade finance through the bank to fund for the importation of those goods,” he recalls.

The results were extraordinary. The business grew from approximately $100 million to approaching $1 billion in revenue, eventually pursuing a public listing. It’s a testament to what becomes possible when financing strategy precedes, rather than follows, growth initiatives.

Building for Long-Term Success

The message for Australia’s growing mid-sized businesses is clear: successful expansion requires careful preparation, not just bold vision. Before pursuing that next big contract, market expansion, or operational upgrade, take time to ensure your financial foundations can support your ambitions.

This means establishing proper financial reporting systems, ensuring tax compliance, understanding the true cost of different funding options, and developing comprehensive cash flow projections. It might not be as exciting as chasing new opportunities, but it’s what separates sustainable growth from costly setbacks.

As Iglesias puts it, the key is being “proactive” rather than “reactionary” about financing. In the world of business growth, the cart should never come before the horse.

Martin Iglesias is a Credit Analyst at Highfield Private with over 20 years of experience in corporate banking and strategic finance. He specialises in delivering sophisticated funding solutions for mid-market enterprises across diverse industry sectors.