A/R FUNDING CASE STUDY: S.O.S. for Acquisition Funding
A/R Funding recently received an urgent phone call from a bank officer who wanted to help a long-time client with acquisition financing. The bank’s client had only two days to complete their process and provide loan approval to the seller. However, the banker was unable to provide financing through his institution due to the client’s reduction in sales, increase in debt, and a shrinking equity position.
A/R Funding quickly assigned resources to the project and began our due diligence process. We obtained historical financial information and all necessary back-up information including agings, articles of incorporation, recent tax returns and the buy-sell agreement for the purchase. After completing our due diligence and conducting a thorough review of the business plan for the new company, A/R Funding approved the $2 million line before the client’s deadline.
This approval and funding allowed the client to purchase a target company that would otherwise have been financially out of reach. A/R Funding worked very closely with the bank (beyond the acquisition), and agreed to pay the bank directly on a small residual loan the bank carried back for a short period of time. This provided the bank additional comfort and allowed the acquisition to take place in record time. The bank also retained a long-time client relationship, including their deposits. Finally, the bank will decide when to re-enter the loan transaction, and will be free to do so at their discretion, without fees or penalties of any kind. This was a WIN-WIN-WIN situation. Contact A/R Funding today and we’ll work hard to make sure everyone wins in the end.