Factoring Case Study For A Printing Company

cash flow scrabble

InWest Printing, Inc. opened their doors for business in 1997 and learned quickly the “feast or famine” nature of cash flow in the printing industry. Within the first year they spent their start-up capital, but managed to secure contracts to print all of the ER forms for 92 hospitals. The future looked very bright, but the glaring problem was a serious lack of cash flow.Printing carbonless ER admission forms was a complex and expensive process, so InWest knew they had to run as big of a printing batch as possible. An additional complication, was that the hospitals had no place to store pallets of forms, so they required monthly drop shipments and 70-day terms for each invoice. To get the deal, InWest agreed to the terms.

The cost to run the first one million ER forms was roughly $150,000, which was $145,000 more cash than what they had available, and they wouldn’t receive their first customer payment until 70 days after delivery. InWest needed cash and they needed it fast.

After being denied a bank loan, Universal Funding, a receivables financing and purchase order financing company, created a program to provide the cash necessary to get the paper rolling.
With Universal Funding’s help, InWest quickly gained access to cash equaling and was able to fund printing, inventory, and delivery of the forms; without having to wait for the hospitals to pay and without incurring any debt.

For two years, Universal Funding paid InWest’s suppliers, which allowed them to grow their profits to a point in which their cash flow was no longer a problem and they were no longer dependent on factoring their invoices.

If your printing company is in need of a cash infusion, please call Universal Funding at 800.405.6035 today to speak to a factoring specialist.

Leave a Reply