Friction With Its Factor Brought These Affiliated Companies Back to Celtic Capital
The Company
The Company consists of two California-based affiliated businesses. One is a manufacturer of tools; the other manufactures compression and injection molded products. The current owner, who, previously, ran the companies, bought them from an equity group in December 2019.
The Situation
Referred by the equity group, we looked at this deal a year ago when the current owner was looking to acquire the businesses. We lost the deal to a factor.
Fast forward a year; revenue was hit by COVID; and this year, bogged down by supply chain issues. The owner has since gotten past the worst of it but not without some friction with its factor. Probably concerned with the losses, the factor limited borrowing.
Realizing his mistake in not going with Celtic Capital in the first place, the owner came back to us for an asset based deal that would give him more money than the factor was willing to provide.
The Solution
Celtic Capital came in with a $1,000,000 Accounts Receivable Line of Credit and a $276,800 Equipment Loan. The Equipment Loan provides the additional money the owner was looking for which will be used to jumpstart sales and get the backlog filled.
The Result
Prospects for the future look good. Expectations are for increased sales and a return to profitability relatively quickly.
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.