[Skytop]

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.

[Kevin Henry-Seacoast]

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.

Skytop,

Didn't we chat about this a couple of weeks ago?

Best,

Kevin

[nrh1lp]

This looks like a pretty clear cut factoring deal... What is the problem?

edit, missed LOC part

[omegafund]

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

[RichardGerard]

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.

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.

[@jeannette]

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
770-362-2307

[RichardGerard]

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
770-362-2307

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?

[@jeannette]

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.