Wholesale Distribution Company

$1 Million Senior Secured Credit Facility

The Client

The company is a distributor of products, materials and equipment primarily to Federal, State, County, and City government agencies, providing them with commodity requirements. Sectors serviced include Prison Industries, Departments of Transportation, Laboratory/Medical, and Contractors. The company provides more than 120,000 products, such as car seats and other traffic and safety products; raw materials for the prisons including textiles, aluminum, kits and componentry; finished goods including rainwear, safety vests, boots, tennis shoes, inmate clothing, linens; and products for law enforcement such as night vision monoculars and personal protection items.

The Situation

The company had a bank line of credit that could not grow in parallel with its rising working capital requirements and a loss the previous year caused their bank to place a cap on the line of credit. At the same time, long term customers began to increase orders and stretched out payment for their bills. Key suppliers refused to continue to extend payments terms, which cumulatively created a working capital squeeze on this distributor.

The Solution

Business Capital was able to successfully present the client’s history with a solid, nationwide customer base and increased demand for product to lending partners and structure a scalable working capital credit line that increased liquidity and enabled the client to increase its revenue generating opportunities, maintain favorable supplier relationships, and return to profitability.

 

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