Accounts Receivable Line of Credit
Founded in 2014, this technology-driven Medical Billing Company helps medical providers identify insurance eligibility and patient responsibility at point of service. In 2020, the company raised a significant amount of capital to support projected growth with the expectation of reporting positive EBITDA for the first time in its history. As the company continued to add customers, management soon realized it needed a working capital facility to fund operations. Before seeking additional equity, the company sought a non-dilutive funding solution.
Instead of focusing on the negative EBITDA, Magnolia Financial recognized the value of the company's strong customer base. Within 24 hours of initial meeting with management, Magnolia extended the company a $350,000 Line of Credit secured only by its Accounts Receivable. The working capital provided by Magnolia Financial allows the company to focus on growing their business rather than having to manage liquidity. Best of all, the Magnolia credit facility also did not further dilute the existing shareholders' equity position.
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