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Giving a boost to a veteran-owned company looking to take off
Accounts Receivable Line of Credit
Situation
Founded in 2021, this veteran-owned company provides a variety of services to companies working directly for the United States government. With significant industry contacts, the owner was able to secure a number of contracts across the country. As a result, the company obtained a $250,000 bank line of credit. As the company continued to grow, the owner realized they needed a much larger line of credit to support the company’s future and goals. The owner approached their local bank and other banks seeking a larger credit facility, but due to limited historical cash flow, the company did not qualify for the bank line of credit that they were seeking. Instead of telling the company “No”, one of the banks referred the company to Magnolia Financial.
Solution
Instead of focusing on the previous year’s tax return that showed limited cash flow, Magnolia Financial focused its credit decision on the company’s quality Accounts Receivable. After meeting with the management team, Magnolia immediately proposed a $1,000,000 Accounts Receivable Line of Credit.
Funds provided by the Magnolia Financial credit facility were used to payoff the existing bank line of credit and also provided additional growth capital. The company was also able to secure a deposit relationship with the referring bank, which will look to take over the line of credit within the next 12-18 months. Neither would have been possible without Magnolia Financial.