A New Jersey based staffing company, with annual revenue of approximately $8 million, was having difficulty obtaining an increase in a line of credit from its bank due to vacillating financial performance year over year. Cambridge Financial Services was retained and determined that an alternative loan structure with a non-bank lender could get the company the additional working capital it needed to grow the business.
The lead consultant noticed that while the company’s financial performance was spotty through the years, it had a significant amount of quality accounts receivable. Per Nick Jalowski, Managing Director of Cambridge Financial Services, “it was clear to us that an asset based finance company, that is not subject to strict regulatory guidelines like banks, could underwrite the deal and increase the availability in a line of credit.”
After composing an offering proposal to explain the opportunity, Cambridge Financial solicited bids from five alternative lenders and all five offered potential deals. Cambridge Financial assisted in negotiating the terms and conditions with the winning bidder, and ultimately closed on a $1.75 million dollar facility; an increase of almost $1.0 million from the prior bank line!
Small and middle market businesses sometimes think that bank loans are the only source of debt capital available, and if they do not meet bank criteria for lending, it can lead to cash flow issues. Cambridge Financial Services has the expertise to determine if alternative lenders are a good fit for a particular situation. Another success story with the help of Cambridge Financial Services, LLC!