Accounts Receivable Line of Credit
Custom Door Manufacturer
Situation
This family-owned business manufacturers and fabricates custom doors for a variety of customers primarily in the food processing, cold storage and pharmaceutical industries. With a strong reputation for providing a quality product at a competitive price, the business began to grow. In order to meet its increasing cash flow needs, the owner approached his local community bank for a working capital line of credit. Unfortunately the banker was unable to approve the loan due to a lack of cash flow and negative equity on the Balance Sheet.
Solution
In order to still help a long-time deposit customer, the banker referred the company to Magnolia Financial. Despite the negative equity and limited cash flow, Magnolia understood the working capital needs of a growing business and extended a $300,000 line of credit secured only by Accounts Receivable. Instead of delaying the start of new jobs or turning away new customers, the company is now able to meet the increased cash flow demands caused by the recent growth. Best of all, the company is now projecting record profitability for the year and expects to "graduate" back to their bank for a traditional line of credit in 12-18 months.
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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