Accounts Receivable Line of Credit
Established in 2012, this Georgia corporation provides tree removal and stump grinding services for property management companies and other commercial customers located in Georgia, Florida and Tennessee. Historically profitable and liquid, the company's line of credit with their bank was not utilized for some years and expired in 2021. Subsequently, due to the economic downturn, the company's customers began to pay more slowly creating cash flow issues. Additionally, labor shortages necessitated increased payroll expense to remain fully staffed. Unfortunately, the same economic factors negatively impacted the company's operating results and the company reported a net loss on their tax returns. As a result, the bank was unable to reestablish the previous working capital line of credit. To provide the company with an alternative, the banker turned to Magnolia Financial for a solution.
Magnolia Financial quickly identified the value of senior management's operating experience and noted the historical positive operating results. Within two business days of receipt of the requested financial information, Magnolia was able to extend a $300,000 Accounts Receivable Line of Credit. Magnolia's working capital solution provided immediate relief of the cash flow issues the company had been experiencing and also provides additional availability to expand operations. The referring bank continues to handle the non-credit relationship and will take back the working capital line of credit when appropriate.
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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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