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Opening new opportunities for a custom door manufacturer

Accounts Receivable Line of Credit
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Cold storage doors

Situation

This family-owned business manufactures and fabricates custom doors for a variety of customers primarily in the food processing, cold storage, and pharmaceutical industries. With a strong reputation for providing a quality product at a competitive price, the business began to grow. In order to meet its increasing cash flow needs, the owner approached his local community bank for a working capital line of credit. Unfortunately, the banker was unable to approve the loan due to a lack of cash flow and negative equity on the balance sheet.

Solution

In order to help a long-time deposit customer, the banker referred the company to Magnolia Financial. Despite the negative equity and limited cash flow, Magnolia understood the working capital needs of a growing business and extended a $300,000 line of credit secured only by Accounts Receivable. Instead of delaying the start of new jobs or turning away new customers, the company is now able to meet the increased cash flow demands caused by the recent growth. Best of all, the company is now projecting record profitability for the year and expects to graduate back to their bank for a traditional line of credit in 12-18 months.

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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