Accounts Receivable Line of Credit
Formed in 2016, this tractor trailer repair company services a variety of commercial customers across the southeastern United States. Historically profitable, this small company began to grow as it won a new contract with a large national carrier. The new business came with extended payment terms as this customer typically paid in approximately 60 days. In addition to the extended terms, increased labor and parts costs associated with the increased revenue created a cash flow crunch. The company approached their local bank for a line of credit but due to limited historical profitability, their banker could not get them approved.
In order to provide the company with an alternative working capital solution, their banker referred the owner to Magnolia Financial. Within 24 hours of the first meeting, Magnolia extended the company a $250,000 working capital line of credit secured by Accounts Receivable. Instead of focusing on the company's historical financial performance, Magnolia based its decision on the projected profitability derived from servicing and maintaining a regional fleet. The cash flow provided by the Magnolia line of credit allows the company to meet its increased payroll while continuing to pay suppliers on time. The company is now on a path to its most profitable year thanks to the fast creative working capital solution 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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