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Closing the financial gap for a sealants and adhesives manufacturer

Accounts Receivable Line of Credit
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Applying sealant to window frame

Situation

This early-stage company manufactures sealants and adhesives for customers across the United States and Mexico. The owner secured an SBA Loan to finance equipment and start-up costs but was also seeking a working capital line of credit to help support growth. A local community bank was unable to offer the company a line of credit because of the limited operating history and the SBA had a lien on all business assets. As an alternative funding solution, the bank referred the owner to Magnolia Financial.

Solution

Impressed with the owner’s industry experience and the company’s customer list, Magnolia negotiated a subordination with the SBA and extended the company a $1,000,000 working capital line of credit secured ONLY by Accounts Receivable. In addition, Magnolia helped the company secure credit insurance on the international Accounts Receivable; thereby making the Mexican customers eligible for funding. The company now has the working capital needed to support its growth and execute the business plan — all made possible by the credit facility provided by Magnolia Financial.

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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