Results 1 to 8 of 8
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01-22-2018, 10:44 AM #1
- Join Date
- Mar 2015
- Posts
- 62
Tricky Line of Credit
Material Handling Business with an exclusivity deal on what they sell
3MM annual Rev
700k in Accounts Receivable
18 Years in Biz
2 partners, 670 & 630 FICO
Unwilling to pledge Real Estate or Equipment - Trying to lean on A/R and Rev alone
5 NSFs in Dec that were all covered by a credit line he has with bank
Looking for something that will feel like a LOC around 1.5MM better than MCA rates
Is it possible? Inbox with any ideas. Appreciate the help.
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01-22-2018, 10:57 AM #2
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,499
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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01-22-2018, 02:08 PM #3
- Join Date
- Jan 2016
- Posts
- 435
This looks like a pretty clear cut factoring deal... What is the problem?
edit, missed LOC partLast edited by nrh1lp; 01-22-2018 at 05:14 PM.
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01-22-2018, 04:57 PM #4
- Join Date
- Jul 2014
- Location
- Jackson Hole Wy
- Posts
- 730
Looks like he has an existing credit line with bank. Most factoring companies would need to be in 1st position and payoff the bank credit line. Depending on the bank balance there may not be enough AR to cover everything. 700k in AR not going to get 1.5M LOC
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01-23-2018, 07:29 AM #5
- Join Date
- Dec 2014
- Location
- Quogue, NY
- Posts
- 1,108
Morning.. If you spoke with Kevin earlier I'm sure he gave you an honest assessment. Ben (Omegafund) is spot on as well.
If the client is doing $3M per year (250k per month), with normal AR turnover, the outstanding receivables should be around 450-500K- not 700. Even so why would someone give them a $1.5M LOC, especially if they have an existing bank line.
If the client has a new contract or substantial upcoming work in his WIP perhaps something can be done.
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01-23-2018, 09:17 AM #6
It sounds like a majority of their AR is turning 90 days + If they have 700 in outstanding we would normally offer a line of around 1.4 depending on the debtors and how quickly the accounts are turning. When the AR starts turning over 90 days, some of the accounts start to not qualify unless they are GE or really good credit accounts. If you would like to send it to me I can give you an assessment of what we would offer your client.
jnearing@transfaccapital.com
770-362-2307Jeannette Nearing | Business Development Officer| AmeriFactors
| M (770) 362-2307
jnearing@amerifactors.com |
http://www.amerifactors.com
https://www.linkedin.com/in/jeannettenearing
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01-23-2018, 09:40 AM #7
- Join Date
- Dec 2014
- Location
- Quogue, NY
- Posts
- 1,108
Jeannette, I believe you're factoring the invoices rather than offering a ledgered LOC or ABL LOC, AND there is a Bank credit line already in place (so he said). So your availability will likely be around 85% of the invoices to 90 days providing only around 500k in liquidity less the amount to take out the Bank's UCC 1.
You can say 1.4 but that is just giving room for growth.. Correct?
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01-23-2018, 10:19 AM #8
The 1.4 is giving room for growth and for slow turning AR, if they already have 700K outstanding and the next month they bill another 250K we need to have room to pay the invoices. We also provide over advances if there is collateral involved and equity in equipment.
We do not provide balance sheet non notification solutions.Jeannette Nearing | Business Development Officer| AmeriFactors
| M (770) 362-2307
jnearing@amerifactors.com |
http://www.amerifactors.com
https://www.linkedin.com/in/jeannettenearing
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