A Classic Example of the Pandemic’s Effect on Small Business
The Company
This Company is a Washington-based cutter/packer of meat products for restaurants and food service companies. The business was founded in 1974 and is still owned and operated by the founder.
The Situation
As it did to the restaurant industry as a whole, the pandemic hit this business hard. The Company had losses in 2020 and suffered even greater losses in 2021 (a March year-end). A steep decline in revenue led to the increased losses which threw the Company out of covenant with its bank at which point the bank asked the Company out. It’s a classic case of the pandemic’s effect on small business.
The Solution
Referred by the Company’s banker, Celtic Capital came in and provided a $1,325,000 credit facility ($1M Accounts Receivable Line of Credit, $150K Inventory Line of Credit and a $175K Term Loan). This paid off the bank and provided much needed additional working capital.
The Result
In the coming year (the Company is five months in), while still not back to pre-pandemic levels, management is expecting a 20% increase in revenue over last year. The Company has done some cost-cutting and that, coupled with a predicted reduction in cost-of-goods which should help the bottom line, will put the Company on a solid path back to bank financing.
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.
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 www.celticcapital.com.