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Metal Stripping Company

Situation

This family-owned business provides metal stripping, paint and rust removal as well as general fabrication for a variety of companies throughout the Eastern United States.  Historically profitable with very little debt, the company hit a roadblock resulting from unexpected additional payroll expense needed to complete a job for a key customer.  Unable to add temporary personnel, the company was forced to use their existing workforce at overtime rates to complete the job on time.  With the additional expense, the company reported a net loss for the first time and payables became extended.  Their banker was unable to provide a working capital line of credit due to the negative trends but introduced Magnolia Financial as an interim solution.

Solution

Within 24 hours of the introduction, Magnolia Financial met with the client and toured their facility.  Impressed by the management team and their operation, Magnolia extended the company a $350,000 Accounts Receivable Line of Credit the following day.  By the end of the week, Magnolia funded the company so they could immediately bring all Accounts Payable current.  The company now has the working capital needed to focus on operations rather than worrying about cash flow and past due suppliers.  They are now back on track thanks to the working capital provided by Magnolia Financial.