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Helping a lumber wholesale distributor branch out

Accounts Receivable Line of Credit
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Racks filled with lumber of all sizes

Situation

Formed in 2014, this wholesale distributor of lumber and wood products sells to a variety of customers across the southeastern United States. The company previously operated as a lumber broker, but recently purchased a manufacturing facility to vertically integrate the business. Due to its success, the company secured a $350,000 traditional working capital line of credit with their bank. As the business expanded, the owner quickly realized that the bank line of credit was not enough to support ongoing growth. Although the company was profitable, their bank was unable to increase their existing line of credit.

Solution

Instead of relying on historical cash flow, Magnolia Financial focused on the company’s Accounts Receivable due from strong, credit quality customers. Within 24 hours of receiving the financial package, Magnolia extended the company a $750,000 Accounts Receivable Line of Credit with the ability to increase as business increases. With the additional working capital provided by Magnolia Financial, the company can now focus on continuing to grow the business rather than worrying about cash flow and keeping suppliers current.

Available when we needed them

Magnolia was really available when we needed them, and the leadership at Magnolia was empathetic to the cold, harsh nature of traditional banking. It gave us a tremendous amount of comfort during a difficult time. Marc Smith and his team really understood where we were, where we were going, and gave us the help we needed to get there.

– Frank Workman, Dealers Supply & Lumber Company
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