Nothing Half Baked with This Commercial Bakery

The Company
This company is a Washington-based commercial bakery. The founder ran the company with the help of a capital infusion from a family member. At one point, however, the founder exited the business and the family member (and majority owner) brought in a local controller and a management team (located in another country) to run the business.

The Situation
With the founder leaving and senior management geographically absent, the business went into a downward spiral. Celtic Capital looked at the company in December, 2017, but the books were in total disarray, the business was losing a significant amount of money and there was nowhere near the availability necessary to pay off the bank; so we turned down the deal. Six months later we were called back in. A highly-competent CFO had been hired and the founder came back to run the business. This new management team discussed with us its plans for turning the P&L around and how it would address the shortfall to the bank.

The Solution
We re-audited, found progress had been made and we liked management’s plan for moving forward. At first, the deal was going to include A/R, inventory and equipment financing; however, the business was not yet cash flow positive so the inventory line was put on hold. To cover the bank’s shortfall, the majority owner paid the bank’s loan down to a certain level and had the bank stay in for a small amount using the equipment as collateral so a term loan wasn’t necessary. Celtic Capital came in with a $1,000,000 Accounts Receivable Line of Credit for working capital.

The Result
This was by no means an easy transaction; in fact, many lenders walked away not wanting to sort out all the moving parts. We hung in and now, if the company hits its goals (which everyone expects), will have over $1,500,000 a month in sales by the fall.

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, or visit us at