Financing the growth of a commercial painting and drywall company

Situation

In business for less than one year, this early-stage company provides commercial painting and drywall services for a variety of homebuilders across the southeastern United States. The company quickly earned a reputation for providing quality service in a timely manner. As the company added new customers, the owner realized he needed a working capital line of credit to support the growth. With less than a year in operation, the owner was unable to secure a traditional bank line of credit.

Solution

Despite the company’s limited operating history, Magnolia understood the value of their Accounts Receivable and extended them a $500,000 working capital line of credit within 24 hours of receiving the financial information. Instead of potentially turning away new purchase orders because of a lack of cash flow, the owner now has the working capital needed to finance the growth. The company now expects to be “bankable” within 12-18 months.