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Building a financial bridge for an industrial welding company
Accounts Receivable Line of Credit & Overadvance Line
Situation
After a number of years working for larger companies in the industry, the owner ventured out and started his own company. Using some of his own capital and a small SBA Loan to get started, the company quickly gained customers due to its owner’s reputation for quality service and attention to detail. As the company grew, the owner soon realized that he needed additional working capital to support the new business. With a limited operating history, the company did not qualify for a traditional bank line of credit and all assets were also pledged to the SBA lender. In order to provide the company with another financing solution, the SBA lender introduced the owner to Magnolia Financial.
Solution
Magnolia immediately met with the owner and was impressed with his industry knowledge and experience. Although the company had been in business less than six months, Magnolia worked with the SBA lender and offered the company a $250,000 working capital line of credit secured only with Accounts Receivable. The owner now has immediate access to cash when he needs it rather than waiting 60 or 75 days for his customers to pay. Rather than worrying about keeping suppliers current and making sure payroll is covered, the owner can now focus on executing the existing contracts and winning new ones.