Early Stage Financing
Entrepreneurs often lack the operating history necessary to raise capital to finance a business. Factoring is often used by startups to provide the capital necessary to get a business off the ground.
Client: New Jersey-based steel company with projected sales of $10 million.
Situation: Client historically sold on COD terms to customers but suddenly was forced to offer Net 60 day terms to retain key customer accounts. This resulted in a cash flow crunch for the business. In addition, the client had significant sales concentrations which made them unbankable.
Need: Client needed cash flow to support daily operating expenses and to take advantage of growth opportunities.
Solution: In less than two weeks, Prestige provided a $2 million factoring facility giving the client the necessary cash flow to operate their business while waiting 60 or more days for payment from customers. In addition, Prestige looked to the credit quality of the receivables and not the sales concentrations, in structuring a financing solution for the client that helped accelerate their growth.
Creative Services Firm
Client: New York-based creative services firm with $2.5 million in annual sales.
Situation: The one-year-old company creates advertising jingles for airlines and other clients. It takes the firm 45 to 60 days to generate billable work and then an additional 45 days before payments are received. This lengthy cycle resulted in cash flow constraints for the firm.
Need: The client required working capital financing to support this growing business.
Solution: Prestige provide a $500,000 line which bridges the gap between invoicing and payment and supports daily working capital needs.
Security Guard Company
Client: New York-based security guard company with $1 million in annual sales
Situation: Two-year-old company faced a 45 day gap between invoicing and receiving payments from customers.
Need: The client needed financing to make payroll, take on new customers and prepare for seasonal peaks.
Solution: In less than three business days from application, Prestige funded their weekly payroll. The client is now able to bid on and secure additional large contracts with the confidence that payroll will always be met.
Manufacturer of Telephone Accessories
Client: New Jersey-based manufacturer of telephone accessories with $1million in annual sales.
Situation: The start-up was looking for an alternative to raising equity at the early stage of their business.
Need: The client needed working capital to pay overseas suppliers in a timely manner.
Solution: Prestige provided a $2.5 million factoring line of credit to meet the client’s initial needs and provide for ongoing growth.
Client: East Coast high-end branded liquor manufacturer.
Situation: The start-up company, which was originally seeking equity financing, was introduced to Prestige by a bank seeking their non-lending business. The client had a 100% sales concentration account which made it very difficult to raise equity or obtain traditional bank financing. In addition, the client’s contract manufacturer was unable to provide terms due to a lack of payment history.
Need: Based on forecasted sales to the customer, the client needed a $3 million line for working capital needs.
Solution: After performing due diligence on the client’s customer, Prestige provided a $3 million factoring line, without diluting equity. Additionally, the referring bank obtained the banking relationship for the client. One and a half years later, the owner sold to a conglomerate for $30 million.