[Fundyman]

Company revenue last year was $500K.

They are in the process of completing a $10M deal (might be a bit more) by next week.

As soon as the contract is established, the merchant will need $1M to meet payroll & inventory for the 1st 60 days.

Expected to take no more than a year to repay in full.

I want to have the company in place that will provide him the financing by the end of the week.

PM me or email: solidmerchantsolutions@yahoo.com

[dpFund]

Hey Fundyman,

I fund a lot of construction. While the amount of the funding request would not be a problem, it raises a few potential issues:

1.) Going from $500k to $10M is a big jump, and one that not all companies can pull off successfully.
2.) From my experience, construction industry net margins seem to hover in the 10% - 15% range. If that is the case here, your client is asking for a huge chunk of their net income in the form of funding. With the cost of capital, it could chew up all of their net.
3.) We would want to understand the timing of cash flows from this new client. If we were to fund this client, the first payment would be due in 30 days. How would the client fund the first (and second) payment, before cash is generated from the client?

If your client is able to address these issues, I would be happy to talk and see if there is a fit to work together.

Best,

Dan Page
dan@fundingstrategypartners.com

[RichardGerard]

Considering the inherent risk associated with Construction, and not knowing whether it is Commercial or Residential deal, AND without seeing the contract to know if they will pay the contractor as 'paid when paid' or if there is any retainage- I'm thinking this is a tough one to have an Underwriter wrap themselves around.. Lender has all the risk..

[Fundyman]

Considering the inherent risk associated with Construction, and not knowing whether it is Commercial or Residential deal, AND without seeing the contract to know if they will pay the contractor as 'paid when paid' or if there is any retainage- I'm thinking this is a tough one to have an Underwriter wrap themselves around.. Lender has all the risk..

Nah, Rich.. I probably wouldn't even waste time seeking funding in this one were it residential. I'm just not that much into acrobatics.

He got a deal with Becthel (you know... THE Bechtel), so it's all commercial. I already have him the heads-up that not much will be happening until after we can see the contract.

[Fundyman]

Hey Fundyman,

I fund a lot of construction. While the amount of the funding request would not be a problem, it raises a few potential issues:
]

Very valid points, Dan. Margins may really be tight. As far as you requiring a payment within 30 days, there is more on the table for this merchant. He also has a $5M job in the works for which he will obtain the contract much faster, and is also working on an acquisition of an profitable company. So there should not be much of a problem here when it comes to making a payment within 30 days of receiving funding.

The thing with him is, I thought he was ready to go. Come to find out he's all over the place. So I'll try to get him structured into one project at a time, and seek financing in the correct order.

[bdshaw]

Good morning all: Rich has a good point.
Do you know the breakdown of their staging cost between labor and materials?
How are they financing the acquisition?
As this deal devopes it seems like a good idea to use all assets of the business, including the acquisition, to put the financing together.
This sounds more like an ABL.
Bob