Where Credit is Due
The company is in warehousing and trucking. Located in Arizona, it rents out space to hold its clients’ products (warehousing) and then ships the products out for them (trucking). The owner of the company had a previous company with a partner who embezzled from that business.
Even though this business owner ended all ties with his previous business partner and his new warehousing and trucking company was doing well, banks had no interest in pursuing a lending relationship with him. He had a few factoring offers but he didn’t want to put his clients on notification or have checks made payable to a factor instead of to the business. Since no acceptable means of financing had been available, the business was running on its cash flow.
With a growth plan to double business with expansion into California and Texas, the owner needed working capital so he merged the business with a smaller competitor, picked up some new clients and set up a web-based portal to improve customer service.
Celtic Capital’s business development officer for the region had been following the company’s progress since inception in anticipation of providing capital when the owner needed it. As soon as the owner merged the business, Celtic Capital came in and provided financing to support the owner’s growth plan and also assisted him in developing a credit and collections policy.
While the owner could have continued to live off of the business’ cash and grow slowly, Celtic Capital’s credit line enables him to take advantage of business opportunities quickly, grow faster, and finally leverage his assets to take advantage of vendor discounts.