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.
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 the global banking environment, the parent company made an abrupt decision to stop supporting the U.S. subsidiary. As a result, 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 probably would have closed.