Background:
A contract manufacturer of metal and plastic medical device implants and instruments, the company has strong roots in the industry because the company founders have decades of industry experience. They work with original equipment manufacturers (OEM) and its services include everything from low-volume prototypes to full high-volume production runs.
Financing Solution: Factoring
Initial Amount: $1 Million
Location: South
Industry: Medical Device Manufacturing
Problem:
The company was experiencing strong growth and had already financed manufacturing equipment purchases to support its increased product offering and production volume. They needed additional capital to support employee growth and ensure they could continually meet payroll obligations. Their bank denied a request for a credit line increase.
Solution:
In lieu of a credit line increase, they began researching invoice factoring. Upon learning of their need, their equipment finance company, Commercial Credit Group (CCG), introduced them to their affiliate, Commercial Funding Inc. (CFI).
CFI provided a letter of intent (LOI) the same day the referral was received from CCG, offering an initial factoring line of $1 million. First, funding occurred within a couple of weeks.
The manufacturing company now has a “home” for equipment financing, supported by strong relationship bonds.
Results:
The invoice factoring line and relationship with Commercial Funding Inc. has:
- Provided them with a growing source of capital – after only six months the line has grown to $1.4 million.
- Delivered additional financial stability and improved their cash flow.
- Afforded them flexibility and peace of mind.
Additionally, CFI has provided information regarding credit insurance to insure receivables and allow factoring for an offshore customer. The combined growth may eventually allow them to convert from a factoring line to an asset-based loan to facilitate additional growth and flexibility.
