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 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.
Refrigeration and A/C Services
Client: New England-based refrigeration and air conditioning service specialist with $4 million annual sales.
Situation: The fifteen-year-old seasonal business had fluctuations in sales and cash flow throughout the year. A request for a line increase to provide additional working capital during peak periods was declined by their bank.
Need: The client needed flexible working capital financing to purchase inventory and hire seasonal personnel.
Solution: Within ten days from application, Prestige provided the client with a factoring facility which provided steady and predictable cash flow and met seasonal demands.
Client: New Jersey-based third generation ready-mix concrete company with $8 million in annual sales.
Situation: The company’s bank was taken over by the FDIC which resulted in their loss of an ongoing funding source. Without a line, the 11-year-old company was unable to pay its vendors and had to scale back operations.
Need: In order to repay its debt to the bank/FDIC and secure financing to resume normal business operations, the company needed a finance company that was sophisticated enough to negotiate with both the bank and the FDIC attorneys to close the deal.
Solution: After several months of bureaucratic negotiations, Prestige factored approximately $1 million in receivables, repaying the client’s debt and cleaning up its payables so that the company could return to normal operations.
Client: U.S. Subsidiary of German carton manufacturer with $5 million in annual sales.
Situation: The ten-year-old subsidiary was historically funded by its foreign parent company. Due to global banking environment, the parent company made an abrupt decision to stop supporting the U.S. subsidiary. The subsidiary faced closure if it could not secure financing.
Need: The subsidiary needed immediate stand-alone financing to provide for its ongoing capital needs.
Solution: Within four days, Prestige purchased and funded $300,000 in receivables which prevented a disruption in operations and preserved jobs. Without this funding, the subsidiary would have closed.