Trucking and Hauling Company

Problem

Despite having strong brand recognition across South Carolina, this third generation trucking company reported significant losses in 2009 due to the slowdown in the construction industry.  Despite reducing expenses, the company was not able to offset the revenue loss which led to a negative equity position.

As the business climate improved, the company recognized an opportunity to re-position its fleet and take advantage of new markets.  Although revenues had stabilized and the company reported small profits for two consecutive months, their Commercial Lender was unable to increase their line of credit.  The 2009 losses and the erosion of Equity in the business prevented the bank from expanding the loan relationship.

Solution

In order to provide an alternative small business financing solution and to preserve the deposit relationship, the company's banker referred them to Magnolia Financial.  Magnolia expanded their credit facility to $750,000 secured by Accounts Receivable. The additional funds have improved the company's cash flow position and are providing the working capital needed to respond to the increased business.  As the equity is replenished and profits continue to improve, the banker will entertain a new line of credit for the company in approximately 12 months.

Back to Sample Transactions