RefinancingWhen a company enters or exits a growth stage, is experiencing financial or operational challenges, or has outgrown its current bank, it is likely time to secure replacement financing. Factoring is a very powerful financing tool and should be considered by business owners when going through periodic refinancing exercises.
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.
Material Handling Company
Client: Midwest bulk material handling company with $10 million in annual sales.
Situation: Client was unhappy with their former factor who was not timely in funding assignments of invoices. The client asked his equipment lender for a referral to a new working capital provider.
Solution: Prestige provided a $2 million factoring facility to pay off the former factor within six days, and together with the equipment lender, worked out a collateral sharing agreement which gave the client greater borrowing power.
Client: New York based paratransit company.
Situation: Client was factoring its receivables with another factor and needed a larger line that the current factor was not able to support.
Need: Client needed to double its existing factoring facility quickly to support two new contracts.
Solution: Prestige paid off the existing factoring line and provided liquidity and peace of mind as the client executed its new contracts.
Client: Virginia based trucking company.
Situation: This 7 year old company was growing quickly and needed its first line of credit to support its growth.
Need: The new government contract that they received required greater resources and equipment.
Solution: By providing this $500,000 line against receivables , client used the available cash to hire additional drivers and purchase two trucks to meet the contract’s demands.
Baby Food Manufacturer
Client: New York-based organic baby food manufacturer with $2 million in annual sales.
Situation: The three-year-old company was experiencing rapid growth due to large orders from big box retailers. The bank was unable to increase its small credit facility.
Need: The client needed additional cash flow to fulfill the orders and be able to take on new customer relationships.
Solution: Prestige paid off the bank and provided $250,000 in accounts receivable financing for their first assignment. Orders grew at a rapid pace, with no risk of having to turn down new orders due to a lack of cash flow. In less than a year, the client successfully refinanced their line with a low cost bank facility and grew their business more than tenfold.