When This Company Reduced Its Foothold in the Gaming Industry, It Was Game On for Celtic Capital
Operating since the mid-1960s, the company is an Arizona-based, full-service job shop manufacturer specializing in the medical, gaming, kiosk and technologies industries.
The company had a heavy concentration of business in the gaming industry which is a low-margin business; too low, in fact, for the company to maintain. As cash continued to get tight, the company brought in a new CFO who helped come up with and implement a turnaround plan. In 2017, as the company was reducing its foothold in gaming and expanding into manufacturing kiosks, a higher-margin business, the company showed a loss which caused its bank to ask the company to seek alternative financing.
With the bank putting heat on the business owner to get the company out, the owner sold the building in which the business was housed to an affiliate. This enabled him to pay down the bank (leaving a $1,400,000 shortfall) and to negotiate with vendors to cash them out. While still in transition of reducing the company’s reliance on gaming, sales were low and the company continued to lose money. It needed funds for working capital and to pay off the bank. At this point, Celtic Capital came in and provided a total credit facility of $5,032,800 – a $3,000,000 Accounts Receivable Line of Credit, a $500,000 Inventory Line of Credit and a $1,532,800 Term Loan on the company’s machinery and equipment.
The company’s CFO started with another lender but they were taking too long and couldn’t provide enough excess availability so he shifted gears to Celtic Capital. He was very impressed with how we handled both the structure and process of a credit facility that would more than meet his immediate needs. We moved quickly and delivered exactly what we promised. Our facility provides the much needed relief the company requires until March, 2019 at which time projections show that the business (with higher margins) will kick up and return the company to profitability.
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.