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Helping an industrial temporary staffing company make payroll

Accounts Receivable Line of Credit
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Temporary industrial staff worker wearing hard hat and vest pulling dolly.

Situation

This staffing company provides temporary labor to a variety of commercial and industrial companies across the southeast. When the company’s largest customer converted the personnel from temporary to permanent, revenues decreased almost 30%. The company was not able to downsize quickly enough and reported a net loss for the year. As a result, their local community bank decided not to renew their line of credit. In order to provide an alternative lending solution, the bank referred the company to Magnolia Financial.

Solution

With extensive experience financing staffing companies, Magnolia understood the challenges but recognized the company’s strengths. After an initial discussion with management, Magnolia Financial proposed a $300,000 Accounts Receivable Line of Credit with a 90% advance rate. The working capital provided by Magnolia not only paid off the bank in full but also gave the company additional availability to meet its payroll obligations. The bank was able to reduce their exposure while keeping the deposit relationship. The company can now focus on growing the business rather than having to worry about weekly cash flow issues.

A Breath of Fresh Air

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.

– Kerry Coker, Kamado Joe
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