Textile trade company uses $100,000 line of credit to cover cash crunch

Textile trade company

Textile trade company uses $100,000 line of credit to cover cash crunch

A textile trading company has been in business for 3 years. From 2006 to 2007, the company's revenue grew by over 400 percent. Unfortunately, the current economic recession has hurt the company's cash flow. To service orders and manage costs, the business owner has added new product lines and started importing in bulk.

The Need

With a limited credit history, the business owner only qualified for high-cost private loans. The entrepreneur wanted to refinance the expensive private loans with a line of credit from a bank to service the existing demand and cope with the short-term cash crunch.

Financing Solution

After reviewing the business challenges and financials of the company, Biz2Credit recommended consolidating the company's business banking, shortening the receivables and implementing a structured account payable plan to improve cash flow. This helped the company to improve short-term cash flow and made the bank feel more comfortable about extending a larger line of credit.

Results

  • Received $100,000 line of credit in 15 days
  • Strengthened case to increase line by another $50,000 over the next 2 months
  • Stream-lined the accounts receivables and accounts payable cycle

Benefits

  • Received line of credit at prime plus 2
  • Improved business creditworthiness and ability to increase line in 2 months

After reviewing the business challenges and financials of the company, Biz2Credit recommended consolidating the company's business banking, shortening the receivables and implementing a structured account payable plan to improve cash flow.