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Helping a tractor trailer repair company service and maintain a regional fleet

Accounts Receivable Line of Credit
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Towing truck getting ready to haul large tractor trailer truck

Situation

Formed in 2016, this tractor trailer repair company services a variety of commercial customers across the southeastern United States. Historically profitable, this small company began to grow as it won a new contract with a large national carrier. The new business came with extended payment terms as this customer typically paid in approximately 60 days. In addition to the extended terms, increased labor and parts costs associated with the increased revenue created a cash flow crunch. The company approached their local bank for a line of credit but due to limited historical profitability, their banker could not get them approved.

Solution

In order to provide the company with an alternative working capital solution, their banker referred the owner to Magnolia Financial. Within 24 hours of the first meeting, Magnolia extended the company a $250,000 working capital line of credit secured by Accounts Receivable. Instead of focusing on the company’s historical financial performance, Magnolia based its decision on the projected profitability derived from servicing and maintaining a regional fleet. The cash flow provided by the Magnolia line of credit allows the company to meet its increased payroll while continuing to pay suppliers on time. The company is now on a path to its most profitable year thanks to the fast creative working capital solution provided by Magnolia Financial.

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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