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: 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.
Client: Midwestern U.S. manufacturer with over $1 billion in annual sales.
Situation: The subsidiary’s parent company embarked on a major capital expenditure program, resulting in restrictions on intercompany advances.
Need: Although strong financially, the client needed working capital flexibility without creating debt.
Solution: Prestige purchased their receivables without recourse through a $30 million factoring line, so the client could have access to immediate cash. As factoring is not a loan, the company assumed no debt on its balance sheet.
Client: New York-based Microsoft software consultant with $4 million annual sales.
Situation: The six-year-old company was seeking to refinance its line when it became a victim of a bait and switch scenario by an unscrupulous lender. Shortly before loan closing the company learned that the lender’s actual terms varied drastically from the original proposal.
Need: The client was in need of immediate financing and wanted a lender they could trust.
Solution: Prestige provided a fast, simple and straightforward proposal and closed on a factoring facility within five business days.