Recent Transactions

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Building Services and Management Company

 

SITUATION:

 

This growing company provides Janitorial, Staffing and Security for commercial buildings across Virginia.  Their bank had an existing $175,000 Line of Credit outstanding; however, with new contracts and anticipated growth, the company needed additional working capital to support that growth.  With limited profits and the owner’s challenged personal credit, the company did not qualify for a larger credit facility.  In order to help his customer and provide another solution, the banker introduced Magnolia Financial as an alternative funding option.

 

SOLUTION:

Impressed with the growth opportunity and the strong customer list, Magnolia Financial proposed a $425,000 working capital line of credit secured only by the company’s Accounts Receivable.  The proceeds were used to pay off the existing bank line of credit and provide the company with growth capital.  Instead of having to wait 30, 45 days or more for customers to pay, the company is now able to draw on their credit line with Magnolia immediately upon invoicing customers.  As the company continues to grow, they can focus on winning new contracts rather than worrying about how to cover payroll.  The banker was able to keep the deposit relationship and hopes to bring back the credit facility within 12-18 months.