Avenue B Staffing Services borrowed $100,000 from a local bank, as they had been in business for several years, had a healthy client list, and a very steady revenue stream. Upon learning that their biggest client had gone into a Chapter 7 bankruptcy, the owner realized the she was going to be unable to make the scheduled loan payments for the foreseeable future. Avenue B still had payroll to meet and a large quarterly tax bill due in a few weeks.
The bank, while sympathetic, couldn’t lend her any more money, and were prepared to hand her off to their special assets department. The business banker remembered a presentation he had seen regarding Universal Funding Corporation, an accounts receivable financing company. Universal Funding stepped in and was able to factor all of the other open invoices, providing access to immediate cash that was tied up in the unpaid accounts receivables.
Working with the bank, Universal Funding was able to establish a workable payment plan, help Avenue B Staffing meet payroll, pay taxes, and grow the business back to where it was before the major client went under. An added benefit that came out of working with Universal Funding was that Avenue B was able to evaluate existing and new customers’ credit to make sure they wouldn’t face that predicament again. By utilizing services that are a part of Universal’s standard credit processes, Avenue B would prevent the scenario from happening in the future. Avenue B continued to make their loan payment schedule with the bank, and in turn the bank kept the healthy business account open.
As a banker you witness firsthand when your clients end up in these critical predicaments. Call us at 1-800-405-6035 so your clients can experience a favorable outcome like Avenue B and their bank did!