In addition to struggling with collections, bad debt and a lack of working capital, this company also operated below breakeven. Their debt exceeded the value of A/R and they were placed on cash-in-advance terms with vendors. The company was in work out with their primary bank on a $6 million credit facility.
Local family owned and operated wristwatch company headquartered in Upstate New York with its roots dating back over 100 years
• Majority of accounts receivable were long-standing relationships going back 40 years
• Provided Trade Financing and a Factoring Facility
• Conducted a credit review of all customers
• Reestablished credit terms with the company’s vendors
• Had company sell off old unusable inventory & non-sales generating assets and release excess employees to reduce monthly operating overhead
Sales doubled first 12 months – expected to increase by another 30% for 2014 • Customer base shifted from small boutique retail stores to major big box retailers and home shopping shows • Bank line significantly reduced
Following the devastating effects of Hurricane Sandy, the company experienced a market-demand extension of payment terms. As a result of the slowdown in cash flow there was a delay in payment to suppliers, missed bid opportunities, and the company couldn’t fund payroll or meet increased demands. The company was put into financial distress when they were turned down by local banks and their recommended financiers. Due to this, the company couldn’t meet other loan covenants, experienced debt hangovers, strict credit limits and balance sheet discrepancies.
Locally owned and operated electrical contracting firm in New York City
• Clients: City of New York, NYS Board of Education, Mass Transit 3
• Provided a Single Invoice Factoring Facility
• Electrical Contractor Used Capstones Financial Statement to demonstrate financial capability and increased his bidding opportunities and wins
• Capstone factored the invoices and paid suppliers and subcontractors directly under funds control
Increased bonding value to $10 Million with retained earnings • Increased sales by 2.5 times in 2013 • Won an additional 10 SCA contracts for
Because of the financial crisis, this company experienced hangover effects, including an increase in delayed payments from General Contractors, a lack of working capital to buy supplies and pay vendors, missed bid opportunities and more. The growth was outpacing cash flow and larger payroll commitments weren’t met, increasing the company’s number of unpaid invoices.
Painting subcontractor located in the Yucca Valley, California
• In business for over 42 years
• Clients: Large commercial and apartment complex construction firms
• Relationship with Capstone for over 2 years
• Provided a Single Invoice Factoring Facility to increase working capital
• Total volume factored invoices approx. $2.5 million
• Factored close to 100 invoices
Increased business volume by 15% in 2014
• Contract backlog of $300,000
• Expansion into other verticals of the painting industry including custom homes and homeowner associations (HOAs)
• Firm can now focus on planning and performance of contracts while bidding on new work opportunities
The process of collecting the debris was complex because the debris first had to be identified. A sonar ship was hired by our client to identify all of the debris and then equipment had to be deployed to remove it weather permitting. The debris consisted of simple materials like wood to complex material like steel ships and everything in between like patio furniture, cars, washing machines, dryers, other home appliances, and sheds. The client, had they elect to self-finance this project, would have required over $3,000,000 of working capital during the period that the first round of invoices were issued. The New York municipal agency generally takes extended terms prior to issuing payment. If the client lacked the $3,000,000 working capital, each subcontractor and material vendor would also be required to support the project for an extended period of time expending his or her own resources without payment from our client.
In 2013 the Tri-State are was devastated by Super Storm Sandy
• Long Island waterways were littered with storm debris, requiring extensive cleanup solutions
• Capstone came up with a factoring solution to meet our client’s working capital needs
• Implement a swift course of action for accelerated cash flow
Because of the client’s ability to demonstrate to the NY municipal agency that it could finance itself and perform to a high standard under this contract, the client has been awarded a subsequent $8,000,000 contract.
LEARN MORE TODAY
GDP tends to be most influenced by the goods sector, which includes areas like mining that causes fluctuation of the GDP based on whether times are good or bad.