ACCOUNTS RECEIVABLE LINE OF CREDIT
Machine Part Repair Company
Situation
Formed almost 20 years ago, this small, family-owned business specializes in electric motor repair and outsourced machine shop services for a variety of local companies. With a strong but small customer base, the company enjoyed a solid reputation for top notch service at a reasonable price. However, due to cash flow constraints, the company periodically had to turn away new customers. In order to try to grow the company, the owner approached their local bank for a working capital line of credit. Due to limited profits and a deficit net worth from excessive distributions, their bank was unable to approve the request. However, in order to provide an alternative solution, the banker referred the company to Magnolia Financial.
Solution
Instead of focusing on the financial statements, Magnolia understood the value of the company's customer relationships and the opportunity for growth. Within 24 hours of the initial introduction, Magnolia proposed a $150,000 Accounts Receivable Line of Credit. With the working capital provided by Magnolia Financial, the company added 2 new shop workers to increase capacity. The owner no longer has to turn away new business and is projecting record profits for the year. Neither would have been possible without the working capital provided by Magnolia Financial.
What our Clients Say
Kerry Coker, KAMADO JOE
"A Breath of Fresh Air"
"The Magnolia guys have a real ‘can do’ attitude. Marc Smith and his team are super responsive and upbeat. They can fund within a matter of days. They are always looking for positive opportunities for their clients. It's a breath of fresh air to work with someone like that."
Frank Workman, Dealers Supply & Lumber Company
"Available when we needed them"
""Magnolia was really available when we needed them, and the leadership at Magnolia was empathetic to the cold, harsh nature of traditional banking. It gave us a tremendous amount of comfort during a difficult time. Marc Smith and his team really understood where we were, where we were going and gave us the help we needed to get there.""
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