The Company
This long-established company is a Pacific-based distributor of tools, hardware, and safety equipment serving customers in the manufacturing and construction industries. With a diversified customer base, recurring demand, and strong supplier relationships, the business plays a critical role in supporting industrial operations, production facilities, and active job sites.
The Situation
Despite solid underlying performance, the Company experienced financial covenant violations under its existing bank credit facility, prompting the bank to request an exit. The timeline was compressed, as the bank required the loan to be paid off before the line of credit expiration date. This created an urgent need for alternative financing, limiting access to traditional bank solutions. The Company required a lender capable of executing quickly, valuing accounts receivable as collateral, and delivering working capital financing without disrupting day-to-day operations.
The Solution
Celtic Capital, recognized for its speed and expertise in asset-based lending, was referred to the transaction. Following an efficient underwriting process that focused on the Company’s accounts receivable portfolio and cash flow, Celtic Capital provided a $2,250,000 Accounts Receivable Line of Credit.
The facility was structured to pay off the exiting bank and deliver additional working capital to support operational stability and planned growth initiatives. The transaction closed by the deadline given, allowing for a seamless transition and uninterrupted business continuity.
The Result
With a new accounts receivable financing solution in place, the Company is positioned for long-term success. Its strategic plan includes deploying products in retail facilities using advanced inventory tracking and automated billing technology, modeled after how Amazon Fresh facilities operate. This approach enables real-time inventory visibility, automated purchasing and replenishment, representing a revolutionary advancement in this industry’s distribution.
Supported by flexible financing and a growth-oriented lending partner, the Company now has the foundation to scale efficiently, improve margins, and strengthen its competitive position.
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 more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset-based financing solutions from $500,000 to $8 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.
If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or mhafner@celticcapital.com, or visit us at celticcapital.com.