Staffing-Success Story

Hey DF,

Most of you know we are Seacoast Business Funding a division of Seacoast Bank. We offer flexible working capital solutions in the forms of factoring and asset based lines of credit.

From time to time I will post some industry insights or share some success stories. By now, most of you know we love....i mean love staffing companies so I thought I would share a success story about a deal we recently closed.

-The scenario:
-3 year old South East based IT temp staffing company providing services to large end customers directly or through vendor managers.
-The Company had a small $500K line of credit with their bank. Their growth quickly outgrew their line last year and their bank was not willing to increase the LOC. The Company decided to take a cash advance to keep pace with growth. Over the course of 9 months they took 3 advances totaling $450K. Revenue for the year was $8Mil.
-They prospect....now client was referred to us from a referral source that was contemplating yet another advance for the Company. The Company refused because the cost was eating into profitability and they asked the referral partner to find an alternative. The advance would have netted the referral partner 8 points on another 50K advance or $4,000.
-When we spoke with the Company we learned that the growth was continuing and for 2018 the Company will likely book $12Mil in sales. Their bank was still unwilling to help, they did not want another advance, and AR was sitting at $1.7Mil and growing.


Our solution:
-We offered and closed a $2.5mil factoring facility at a rate that was 4.5% higher than what they were paying at their bank, and significantly....i mean significantly cheaper that the cost of the advances.
-The revolving facility allows the Company to finance their receivables weekly.
-The Company was thrilled that we offered aggressive advance rates on AR and also set them up with operating accounts with our bank.
-The referral partner is thrilled as he was able to get his client a great alternative to finance working capital AND in 3 months made more than he would have with the advance mentioned above....and has 9 more months to go on this term with the client before renewal period.

End result: The client is very happy, our referral partner is very happy, and WE are very happy and will likely have this client for a few years.


Best,

Kevin