Taking a Larger ABL Out of a Small, Unprofitable Deal is a Win-Win
This company is an Oregon-based provider of computer staffing personnel. As specialists in computer technology, the company provides software development talent on a part time basis.
The company was financed by a bank-owned asset based lender for fifteen years and the relationship between them was very good. The only issue was that loan didn’t meet the lender’s minimum size requirement. As this was a good client, the lender wanted to make sure the company went to another lender that would handle the relationship well. The lender had referred deals to us in the past, was happy with how we managed and worked with their clients, and over the years had become quite friendly with Celtic Capital management. It was no surprise that it referred this company to us.
Celtic Capital took over the financing and provided the company with exactly the same deal it had – a $750,000 Accounts Receivable Line of Credit. The deal was basically a swap of one lender for another.
Typically, larger, bank-owned asset based finance companies have more pressure on them to grow. As such, they can no longer profitably service smaller loans. Having a strong relationship with an entrepreneurial asset based lender like Celtic Capital that can come in and quickly and easily take out unprofitable deals, is a win-win for all.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.