Accounts Receivable Line of Credit
This early-stage company installs and upfits police and emergency vehicles with the required lighting, electronics, and technology. Started by a former police officer, the company gradually grew its municipal customer base. As sales steadily increased, the company's cash flow lagged as customers paid in 45, 60 days or more while supplier payments were due strictly on 30-day terms. In order to improve cash flow for the growing business, the owner approached his local bank for a working capital line of credit. With limited financial reporting and a lack of historical profitability, the bank was unable to approve the line of credit request. As an alternative funding solution, the bank introduced the company to Magnolia Financial.
Despite the lack of financial information to review, Magnolia Financial focused on the strong, credit worthy customer base which was made up primarily of municipalities. Within 24 hours of the initial meeting, Magnolia extended the company a $250,000 Accounts Receivable Line of Credit. With the additional working capital provided by Magnolia, the company can now fulfill new contracts on a more timely basis rather than waiting to be paid by existing customers. The owner no longer has to turn away new business because of a lack of cash flow and can simply focus on growing the business. That would not have been possible without the Accounts Receivable Line of Credit provided by Magnolia Financial.
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Kerry Coker, KAMADO JOE
"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
""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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