Growth and Acquisition Financing
Typically, as a company grows so does its need for financing. Companies need to have ready capital to take advantage of opportunities, whether organic growth or by acquisition. Factoring provides that peace of mind and reliable financing.
Client: East Coast electronics distributor with $3 million in annual sales.
Situation: The distributor was an existing client of Prestige Capital and its management team was well known to Prestige. The Client’s owners made the strategic decision to focus their attention on other core businesses and wanted to divest the electronics distributor.
Need: Client’s senior management team approached Prestige to fund a management buyout.
Solution: Within three business days, Prestige refinanced the existing facility for the newly acquired company with the new ownership group.
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.
Client: East Coast technology company with $10 million in annual sales.
Situation: Client sought cash flow to grow their business without diluting equity.
Need: Client pre-bills its customers one year in advance, however there can be a delay before the client receives payments from its customers. In the interim between invoicing customers and collecting cash receipts, the Company needed capital to fund daily operating expenses.
Solution: Prestige provided a $750,000 factoring facility within seven days and developed a confirmation letter for the client to provide to his customers which guaranteed payment of the invoices, thereby providing a workable solution for both Prestige and client.
Television Production Company
Client: New York-based television production company.
Situation: Client needed immediate working capital to support the production of a Super Bowl television ad.
Need: Client needed to borrow on progress-billed invoices which historically are difficult to finance.
Solution: Prestige provided a $3 million factoring facility within 10 days and helped the client obtain appropriate verifications and fund without an estoppel letter, in which a customer, or account debtor, promises that they will not offset future payments based on past client performance. Estoppel letters are required by most lenders and are sometimes difficult to obtain.
Client: 21 year old window company located in New York
Situation: The company needed additional capital beyond their bank facility.
Need: The bank contacted Prestige to assist their client who had been with them for many years.
Solution: Within 5 business days, Prestige provided a $5 million dollar line to enable them to fill a backlog of orders and continue to operate their business. Additionally, Prestige provided a Factor’s Assurance letter to their supplier in order to enhance their timely payments to their suppliers and run their operation smoothly.