Our Deal Made the Future Look Brighter for This Lighting Products Company

The Company
The company is a California-based designer and distributor of lighting products for both retail stores and hospitality businesses.

The Situation
When his partner retired in 2014, the owner decided to expand into the hospitality market. He spent quite a lot of time and money on this and, unfortunately, neglected the core business. The expansion didn’t pan out as hoped and the company suffered losses throughout 2016 and 2017. In response, the company’s lender (a large bank) restrained the owner’s access to cash by a continued reduction in his credit line.

The Solution
While staying in the hospitality market, the owner refocused efforts back more towards retail where the margins are better, and even though in 2018 losses were reversed (results through August indicated sales trending up 50% over 2017), the bank refused to increase the line of credit. With the anticipation of continued growth, the owner decided to leave the bank to obtain a larger credit line. He was referred to Celtic Capital and we provided him with a $2,000,000 facility – an A/R Line of $1,650,000 and an Inventory Line of $350,000.

The Result
While the company started 2018 over leveraged, its results through August were impressive. The company is very well run, has strong financial people, and if the business continues on its current trajectory, should be able to return to bank financing by 2020.

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.