A/R FUNDING CASE STUDY: S.O.S. for Acquisition Funding

 In Accounts Receivable Factoring, Case Study

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 thAR Funding Article 2 Imagee 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.

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