Business Owner Pivots From Impact of Tariffs
This is a California-based manufacturer and distributor of high-end furniture. The furniture is manufactured overseas. Having been hard hit by tariffs, the owner began to consolidate and transition manufacturing from China to the Philippines.
Because of the transition, last year, the Company showed big losses. It’s also showing losses this year. Though with its bank for twenty years, the losses and covenant violations prompted the bank to ask this Company out.
Celtic Capital came in with $2,600,000 Accounts Receivable and Inventory Lines of Credit to replace the bank’s line and provide additional working capital to carry the Company through its slow season.
Within a week of funding, the owner asked for an over-advance. There are big furniture shows every October and April and the inventory needs to be ramped up for those shows. As this is a short term need (not to cover losses), and we have the collateral for it (inventory), we did provide the advance to help the owner work through this cash flow issue.
Thanks to transitioning manufacturing to the Philippines, costs are back in line. Losses should be a thing of the past and the Company projects to be back in the black shortly.
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.