CASE STUDY: business financing help through accounts receivable factoring
Medical Supply Distributor
Invoice factoring is a unique way for a family member or trusted employee to buy a company. Several years ago, MP Star began a receivables factoring relationship with a medical supplies and equipment distributor. Greg, the office manager, was offered an opportunity to buy the long-established company from the current owners.
MP Star offers business financing help when banks can’t–or won’t.
While Greg had a working knowledge of the accounts, the financials and the operations, he needed financing to complete the purchase and to operate the company going forward. He and the owners approached their existing bank with a proposal. Even though the company had a six-figure line of credit with the existing bank (of which 75% of was not being used), a large amount of accounts receivable outstanding, and an excellent, profitable history, the bank was not interested in providing financing for the deal.
Turning to MP Star for receivables factoring creates a prime opportunity.
In regrouping, Greg utilized accounts receivable factoring with MP Star as a way to get the business financing help he needed. MP Star was able to convert the existing accounts receivable into cash. Greg used a portion of the invoice factoring proceeds to pay off the line of credit from the bank and the balance to complete the purchase. Learn more about accounts receivable factoring.
Invoice factoring offered the ideal solution to an entrepreneur who needed business financing help to buy a company.
Combining the balance of the factoring proceeds with his own capital, Greg paid of the bank, made a substantial down payment to the current owners and signed a note for the balance to be paid over a few years. Greg then used the ongoing receivables to fund payroll and operate the company while he continued to make payments on the note. Thus the deal was sealed because the entrepreneur had utilized invoice factoring to convert the invoices into a business he could call his own. Contact us for your custom accounts receivable factoring program, or request a free receivables factoring quote today.