Kevin,

Sounds like a trick question.. What we are not being told is what debt does the client have on the balance sheet. How did they get to this point (3M per month) especially with growth and a stretch of not being profitable?

As this is simply a scenario to ponder-if the outstanding A/R is 3.5 Million to credit insurable clients, there is 300k in unencumbered equipment, and 100k in perpetual inventory- I would likely call a commercial bank that has an ABL division that liked this particular type of client.

As this was a bank- their cost of funds would translate to affordable capital to the client- that rate would of course be subject to all the mitigating risk factors. After introducing it to such a contact, I would likely gauge their interest and have a fail safe ABL firm in play- just in case UW from the bank was more conservative than other folks that play in that space..

I would expect a deal like this to close in approximately 30 days. If in fact the infusion of capital propelled the client past critical mass- the client would be eligible and attractive to several commercial lenders within a year- to be conservative..