Case Study – Information Technology Company

Client: “Company A” solves mission-critical IT challenges for government and commercial customers.

Synopsis: For several years, Company A maintained a strong relationship with their bank. Then one day, the government decided to reduce IT contracts, notifying Company A that they were no longer needed as a vendor. Additionally, the government reduced rates on their existing contracts. Company A wanted to honor established rates with their sub-contractors, but this forced them to pay more per hour than they could afford.

This unfortunate situation occurred suddenly and without warning. Company A was unable to secure new business quickly enough to meet their monthly obligations. The financial stability of the company suffered. Company A incurred losses.

In response, Company A’s bank did the following: First they drastically reduced Company A’s line of credit. Then they required more collateral, more equity, and a cash investment from a family member who was not involved in the business. The bank’s decisions were in line with their strict regulatory environment, but Company A’s management team was frustrated and discouraged.

What happened next?

Company A’s CPA referred them to A/R Funding. After a brief approval process, Company A received funding off their account receivables, allowing them to bolster their working capital and cash flow positions. Both Client and CPA appreciated the flexibility offered by A/R Funding, and all parties look forward to a lengthy relationship.

Solution: A/R Funding provides Company A with cash flow, working capital funding, and a steady, reliable financial relationship.