Accounts Receivable Line of Credit

Commercial Pressure Washing Company

Situation

This commercial pressure washing and sweeping company created a unique process to clean faster and deeper than traditional methods.  Their proprietary fleet of cleaning machines are eco-friendly as they recycle 90% of the wastewater used in washing.  The company's revenue spiked as they brought on new equipment and expanded the fleet.  The growth created new challenges as the company needed additional working capital to cover the increased payroll and other expenses.  Unfortunately, the company was unable to secure a line of credit from their local bank due to a lack of profitability.  Instead of simply saying "no", the banker referred the company to Magnolia Financial as an alternative funding solution. 

Solution

Despite a prior year loss, Magnolia focused on the company's Accounts Receivable and their strong customer base.  Using only Accounts Receivable as collateral, Magnolia Financial extended the company a $250,000 working capital line of credit.  Instead of waiting 60 days or more to be paid by their customers, the company now has access to those funds the day they invoice. The improved cash flow allows the company to focus on their growth plans rather than worrying about meeting their short-term obligations.  The company is now on a path to profitability and expects to be "bankable" in 12 months thanks to the Accounts Receivable Line of Credit provided by Magnolia Financial.  

>>> Return to Case Studies