An Ex-Banker Said 'Yes' To Every Credit Limit Increase. Here's How It Helped Him Rebuild His Career After The GFC

A 38-person vessel marketed by AdventureFree / Supplied

When the global financial crisis hit in late 2007, corporate portfolio lender Matt Geldard was on his way back to his Brisbane banking job after three years of unpaid leave.

He held the role for just three months before being made redundant from the only career he had known so far.

Geldard is now about six months away from approaching buyers for a travel booking business he built on a $50,000 credit card limit.

He said credit card debt – with an interest rate of 20% – was cheaper than other capital raising options, having suffered an early setback after splitting equity with friends.

“Through my whole life, if I was offered a credit card [limit] increase, I said ‘yes’, to the disgust of everyone else with good advice,” Geldard explained. “But I’m not going to be undisciplined with it.

“I was a banker, and we’d go: ‘Look, we’d lend you the money if you didn’t need it so much.’ So I just always accepted every single credit card limit increase offer I got because I knew one day it could be the difference if I needed cashflow for a business or something.

“Twenty percent [interest] is expensive debt but cheap equity. If you go out there to the market and say, ‘I need equity to build a travel agency and need $100,000’, you’ll have people to report to who want 30%, 40% return on their money.”

Matt Geldard / Supplied

Geldard’s bootstrapped business, AdventureFree, is his second since leaving the banking sector.

It began operating in 2010 although Geldard insists that it was born in 2008, when he left the ANZ Bank, because it was built on the foundations of his first start-up.

The first, which he declined to name, was a yacht rental business of which Geldard was the sole employee. He developed relationships with owners of yachts and superyachts in Queensland and marketed them for holidays, day sailing trips and corporate parties at $1,400 to $9,000 a day.

Geldard estimated the business to have been worth $500,000 when he walked away with nothing in 2010 over a strategic disagreement with other stakeholders – friends who had initially joined as “silent partners”.

Now, he said he would “never” sell equity in a small start-up – not unless it was to someone who would work shoulder-to-shoulder with him on it and who had a specific, necessary skill.

“People have different expectations of their equity, different expectations of dividends, different expectations of risk-taking, different expectations of direction,” he said.

“For a business of this size, to have to spend time entering into a debate to justify every decision is just not worth the investment. I often say to the [AdventureFree] guys that the reason why we can do what we do is because the decisions come from here.”

As a former banker with undergraduate qualifications in banking, finance and risk management, Geldard has had an exceptionally structured, long-term view of the business from the start.

Early on, he spent about $100,000 customising cloud-based Salesforce software to “de-skill” the sales process. Staff now need a minimal amount of training to quickly pull up destination and pricing information on demand.

The same platform powers a range of AdventureFree’s specialist whale watching, outback, sailing Great Barrier Reef and Fraser Island touring brands, allowing the agency’s 7 staff to do as much as organisations three times the size, Geldard said.

Geldard told Business Insider Australia that he would solicit bids from prospective buyers in six months’ time – 18 months at the most. He declined to disclose his target price, but said revenues were forecast to quadruple within three years.

“I’m a banker – I’ve always had an approach to business that businesses should be set up with the exit in mind, with a payday,” he said.

“That’s not because we don’t love it, but [otherwise] you’re not building a business and making decisions along the way on the basis that it’s going to be valuable to somebody.

“From day one, I knew who I was going to sell to. They don’t yet know it, but even if they’re not interested – and I’d be highly surprised if they weren’t – there are enough others out there.”

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