Magnolia Financial, Inc. has provided a $500,000 Factoring Line of Credit to a regional flower wholesaler/distributor. This Accounts Receivable Line of Credit is providing cash flow for the company.
December 10, 2006 (Press Release) --
PROBLEM: Needing Cash Flow for Turnaround Management
The company’s banker could not extend the business a working capital line of credit because of insufficient equity on the balance sheet and 2 years of losses. All assets of the business were pledged to its primary bank, eliminating any collateral to secure financing from other traditional lenders.
SOLUTION:
With a turnaround plan in place that grows the company to maximum capacity by limiting expenses and increasing profitable sales, the primary lender agreed to subordinate accounts receivable to Magnolia Financial in order to provide the cash flow needed to restructure and continue operations. The turnaround is going well and the business is using available cash to expand their customer base throughout the Southeast.
The company’s banker could not extend the business a working capital line of credit because of insufficient equity on the balance sheet and 2 years of losses. All assets of the business were pledged to its primary bank, eliminating any collateral to secure financing from other traditional lenders.
SOLUTION:
With a turnaround plan in place that grows the company to maximum capacity by limiting expenses and increasing profitable sales, the primary lender agreed to subordinate accounts receivable to Magnolia Financial in order to provide the cash flow needed to restructure and continue operations. The turnaround is going well and the business is using available cash to expand their customer base throughout the Southeast.
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