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Helping the numbers add up for a medical billing company

Accounts Receivable Line of Credit
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Medical bill with credit cards sitting on top

Situation

Founded in 2014, this technology-driven Medical Billing Company helps medical providers identify insurance eligibility and patient responsibility at point of service. In 2020, the company raised a significant amount of capital to support projected growth with the expectation of reporting positive EBITDA for the first time in its history. As the company continued to add customers, management soon realized it needed a working capital facility to fund operations. Before seeking additional equity, the company sought a non-dilutive funding solution.

Solution

Instead of focusing on the negative EBITDA, Magnolia Financial recognized the value of the company’s strong customer base. Within 24 hours of the initial meeting with management, Magnolia extended the company a $350,000 Line of Credit secured only by its Accounts Receivable. The working capital provided by Magnolia Financial allows the company to focus on growing its business rather than having to manage liquidity. Best of all, the Magnolia credit facility also did not further dilute the existing shareholders’ equity position.

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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