Success With: Working Capital Financing:
Industry: Business Services
A 15-year-old business services company was utilizing an accounts receivable factor solution to help finance daily operations. As the business achieved success and revenue grew, the cost of borrowing became very expensive. The company was seeking an alternative to its current factor solution.
The management team met with lenders and tried to address the situation on its own but lacked the experience necessary to address all of their requirements. In addition, the company suffered process weakness in billing and collection that led to delayed cash collections.
The Business Lending Partners team identified the root cause of billing/collection issues and recommended improvements that accelerated the company cash collection and brought A/R over 90 days to under 5% of the total accounts receivable balance.
The implemented improvements allowed us to negotiate an Asset Based Line of Credit to replace the factor solution. The ABL solution increased borrowing capacity by 28% while reducing overall cost of borrowing by 50% along with less onerous lender reporting requirements.
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