A Business Owner, Due for a Break, Gets One from Celtic Capital

The Company
The company is in warehousing and trucking. It rents out space to hold its clients’ products (warehousing) and then ships the products out for the clients when necessary (trucking).

The Situation
The owner had a previous business with a partner who embezzled from it. Even though the owner split off from his partner and started this new Company, banks were leery and wouldn’t provide financing. Factoring offers came in but the owner didn’t like the idea of factoring. He didn’t want to put his customers on notification and he especially didn’t like the fact that customer checks would be made payable to the factor instead of to him. He wanted to keep control over his customer relationships which meant he was interested in a line of credit, period.

The business had been running on its cash flow. This was frustrating for the owner as he had a good business concept, a good customer base, and a growth plan to double his business through expansion into other states; however, he had no working capital to bring his plan to fruition.

The owner picked up some additional customers by merging with a smaller competitor but he still needed a lending relationship to meet his true growth needs.

The Solution
Celtic Capital provided a $1.5MM A/R Line of Credit which enabled the owner to take advantage of vendor discounts and leverage his assets.

The Result
According to the business owner, “I could have continued to live off of my cash and grown slowly, but with a credit line I can grow faster because the business is definitely out there.” Mark Hafner, President and CEO of Celtic Capital said, “I knew he had a great business concept and the drive and intelligence to make a go of this business plan. He was due for a break and I’m glad that Celtic Capital could be there for him.”