Our Financing Was a Breath of Fresh Air For This Ceiling Fan Manufacturer
This Company is a California-based manufacturer of high-volume, low-speed industrial ceiling fans. It’s a 13-year old family-owned business (father/son).
The trouble for this Company started at the end of 2018 when one of its suppliers sold the Company what turned out to be faulty fan motors. The Company didn’t know the motors were faulty until they started seeing a lot of returns and experiencing all the associated costs with those returns. The issue led to losses and a lawsuit; and in 2019, the Company was asked out by its bank due to loan covenant violations. Celtic Capital came in to take out the bank.
The Company’s balance sheet was in pretty good shape; the problem was a P&L issue. The bank was owed $3,250,000 but the Company didn’t have that much in availability. When the lawsuit settled, the settlement was used to pay down the bank and Celtic Capital paid off the rest. We provided $2,500,000 Accounts Receivable and Inventory Lines of Credit, which, when coupled with the cash the Company then had on hand, paid off the bank, an SBA loan, and provided additional working capital to fuel the Company’s growth.
If management can turn around the P&L, the Company can probably go back to a bank in about one year. So far, in 2020, it’s just about at break even.
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.