Although The Credit Junction uses data and technology to improve lending to SMBs, we focus our decision making on understanding businesses and the management teams that run them.
The company featured below grew to $100M in annual revenues a few years ago, but an industry downturn cut this number in half. To recover, they underwent a complete operational restructuring. As the market started to come back from its trough, the company was in need of growth capital to allow it to complete its turnaround and meet increasing demand for its services.
The Credit Junction provided a $2,000,000 term loan to the company, fueling their recovery and allowing them to prepare for growth.
ABOUT THE COMPANY:
HQ Location: Southern, United States
In Business For: 5+ Years
Annual Revenues: $50M+
Management: Family owned and operated, 20+ years of industry experience.
Customer Base: Many highly-rated, large corporate customers in the oil & gas sector
CHALLENGES FOR THE COMPANY:
Customer Concentration: 80% of total receivables due from their 7 largest customers, exposing them to additional risk.
Operational Restructuring: Due to oil & gas downturn, company suffered a significant drop in revenues. They successfully executed a multi-year cost cutting effort, and management demonstrated an ability to remain cash flow positive throughout the restructuring period.
Insufficient Availability: Company was seeing a resurgence in volume. Existing lender was unable to provide the additional financing needed to fuel growth.
Existing Financing: Company had good relationship with existing financing sources and management wanted to add a flexible lender to optimize their capital structure.
THE CREDIT JUNCTION'S SOLUTION:
The Credit Junction worked closely with the company and its management to quickly craft a financing solution that met both their short and long term capital structure needs. The Credit Junction properly leveraged assets that were underutilized.