Telecom Business Increases Customer Base with a $500,000 Line of Credit

Background

A minority entrepreneur owns and operates a telecom business with annual revenues around $6 million in 2007. The company is headquartered in New York.

The Need

In response to increased demand, the owner needs working capital to develop online applications, add more resources and expand the distribution network.

Small Business Loan Solution

After reviewing the business and personal financials of the entrepreneur, Biz2Credit recommended taking a line of credit against the strength of the business and personal credit of the owner. Unlike a traditional term loan, a line of credit gave the owner the ability to increase spending on distribution network, web development and payroll. Biz2Credit surveyed various lending options and targeted two lending institutions. The owner received the line of credit at a rate of prime.

Results

• Received a line of credit of $500,000 within 45 days
• Line was provided at prime rate plus 2

Benefits

• Increased annual revenues by over $4million from 2006 to 2007
• Increased margins by 3 to 5 percent due to bulk purchase discounts
• Added 4 people on the payroll
• Increased customer base by over 250 customers
• Launched a global web based service