Accounts Receivable Line of Credit
Healthy Meal Distribution Company
Situation
Founded in 2011 as a healthy home delivery meal service, the company recently expanded into wholesale distribution after being awarded a sizeable Purchase Order from a large national retailer. In order to build inventory to support the new contract, the company approached their local bank for an increase to their line of credit. Unfortunately, the historical cash flow did not support the line of credit request and the banker was unable to approve the increase. Instead of simply telling the customer "no", the banker referred them to Magnolia Financial.
Solution
Instead of relying on historical cash flows, Magnolia focused on the Accounts Receivable due from the large, very credit-worthy retailer. Using ONLY Accounts Receivable as collateral, Magnolia provided the company with an additional $250,000 credit line to support the new orders. The banker was able to keep the deposit relationship and the company can now focus on new customer growth rather than worrying about cash flow.
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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