Accounts Receivable Line of Credit
Formed just a few years ago, this distributor of fire & rescue, medical and safety equipment sells to a variety of local governmental agencies as well as commercial and industrial customers. The company built a reputation for providing a high-quality product at a competitive price. As a result, the business grew their small but solid customer base. As the company looked to expand outside of North Carolina, they approached their local bank for a working capital line of credit to support their growth. Unfortunately, with a limited operating history and minimal profitability, the bank was unable to approve them for a line of credit. Instead of simply telling the company "No", the banker referred the owner to Magnolia Financial as an alternative funding solution.
Instead of focusing on cash flow and the historical financials, Magnolia Financial understood the value in the customer base and extended the company a $300,000 Accounts Receivable Line of Credit. Magnolia also provided advances against Purchase Orders as the company needed help staying current with their suppliers given the rapid growth. Instead of worrying about cash flow and customers taking 45-days or more to pay, the company now has immediate access to cash so they can focus on growing the business. Best of all, the bank was able to keep the deposit relationship and hopes to be able to provide the line of credit within 12-18 months.
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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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