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Feeding a healthy meal distribution company's grow

Accounts Receivable Line of Credit
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Salmon and asparagus healthy meal container next to other food containers.

Situation

Founded in 2011 as a healthy home delivery meal service, the company recently expanded into wholesale distribution after being awarded a sizeable Purchase Order from a large national retailer. In order to build inventory to support the new contract, the company approached their local bank for an increase to their line of credit. Unfortunately, the historical cash flow did not support the line of credit request and the banker was unable to approve the increase. Instead of simply telling the customer “no,” the banker referred them to Magnolia Financial.

Solution

Instead of relying on historical cash flows, Magnolia focused on the Accounts Receivable due from the large, very credit-worthy retailer. Using ONLY Accounts Receivable as collateral, Magnolia provided the company with an additional $250,000 credit line to support the new orders. The banker was able to keep the deposit relationship and the company can now focus on new customer growth rather than worrying about cash flow.

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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