Manufacturer Looking To Pay Down Trade Financing To Stay In Vendors’ Good Graces
Founded in 1953, this is a third-generation California-based manufacturer of precision metal stamping, welding and automated assembly products.
The owner was leveraging the Company’s vendors in lieu of traditional financing. When he put in a large steel order (pre-purchased for use in first quarter, 2022), the debt to the vendors went up significantly. Facing much larger than normal payables balances, the owner wanted to pay down the debt to stay in his vendors’ good graces.
The Company suffered losses in 2020 when sales dropped over 20% due to the pandemic; and with the pandemic lingering on; losses are on the same pace for 2021. That takes bank financing out of contention.
The Company’s CPA referred the owners to Celtic Capital. We provided a $1,000,000 Accounts Receivable Line of Credit to pay down the trade vendors and to provide the working capital needed to support the Company’s anticipated growth in 2022.
Activity is projected to increase in first quarter, 2022. The Company has good customers, but it also has a concentration issue. Its growth plan includes more diversification in the coming year which should put it back on track to profitability.
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.