A New Workable Program for a Family-Owned Staffing Company
Challenge: This family-owned staffing/consulting company were not happy with the service of their current funder. They needed more flexibility and better customer service satisfaction in their funding relationship so they would feel comfortable in taking on new business and growing.
Solution: Providing them with a $2MM Accounts Receivable/Payroll Funding program was just the beginning. Our program had a few significant advantages. We provided them more competitive terms, a higher advance rate, and we negotiated an Intercreditor agreement with another existing lender. We also dramatically simplified their funding process. They tell us that our personal customer service and account management has given them the expediency and flexibility that they wanted and we have been delighted to work with them.
Cash Flow to Fund Purchase of All New Trucks
Challenge: The CEO of a domestic transportation company needed increased cash flow from his Accounts Receivable to partially fund the purchase of all new trucks. His customers required higher quality trucks to handle premium loads heading primarily to Mexico.
Solution: Meritus provided a $2,000,000 Line, which enabled them to get the capital they need. The company can now meet demands for the most difficult load request and has increased business substantially with a larger presence not only in the USA but also in Mexico.
More Flexible Funding Required
Challenge: The CEO and former CPA from one of the top accounting firms in the country required more flexible financing than their current bank. They expressed sincere dissatisfaction with their current bank LOC that was not meeting their current needs. They needed aggressive pricing to provide the additional capital to fund the current payroll demands and do a bank buy-out. The company had additional complications with several of their divisions and accounts payable/debt issues.
Solution: Meritus provided a $5,000,000 A/R Factoring Line giving them plenty of growth potential, paid off their bank, and provided an immediately available extra stretch piece of capital to meet the current staffing demands and increase the customer base. Our Meritus Team worked through some difficult challenges and complications to get the first funding done and to the satisfaction of the client. The company is now positioned to receive more government contracts and customers. With our funding, they can attract the staffing personnel they need for their niche markets, and have the freedom and flexibility to maintain steady growth.
Bank Line and Additional Funding for Growth
Challenge: Our new client has an excellent track record of providing office supplies, equipment sales and servicing to schools and city government customers. Business is strong and their bank would not increase their current line of credit to provide the necessary capital to take on the new opportunities being presented. They needed the ability to smooth out cash flow and allow time for this sectors traditionally longer payment terms.
Solution: Meritus provided a $2,000,000 A/R Factoring Line that immediately provided them added liquidity. We also coordinated an Intercreditor agreement with their bank which enabled the client to get the cash flow needed for their existing and future clients. Our Meritus Operations Team visited the client and worked out in advance all the specific needs this client required to keep their current internal office and external customer processes working smoothly during the funding transition. They were able to keep their bank line in place and still access our funding to fuel their growth. Another happy client, we love our job!
Oil & Gas Growth
Our new client was facing a very common challenge that we see in the exploding Oil & Gas Industry. Their small regional bank was tapped out at a $1MM LOC; this could not adequately cover existing business much less any new contracts. In other words: their growth was in a stranglehold.
Meritus provided a generous $5,000,000 A/R Factoring Line for this growing client. This line allowed them to meet all of their current needs and buy out the bank to secure themselves long term stability and place to grow. As needed, they were provided limited to no verification with their customers, along with the excellent customer service they needed to easily manage their account to keep their customers satisfied. This client is now well-positioned to meet their high-growth financial needs and set up for any future entity expansion.
Maxed Out Current Factor
Our client, a temporary staffing company, came to us with a problem that we see again and again:
- They were experiencing successful yearly growth
- Their current factor was maxed out and unwilling to listen to their client’s requests and needs
- They did not have the ‘means’ to grow
Would this client stay stagnant, or could they find a way to successfully take advantage of their 35% year-over-year-growth and continue the progressive growth of their business? Meritus provided our client with a $11MM funding and $20MM max LOC, giving them the following:
- The ‘means’ to grow
- The ‘room’ for growth, and
- The ‘opportunity’ to move forwards rather than backwards
Factoring Line to Support New Business Model
Challenge: Our client started a new company with a business model that was completely different than his existing business. The Newco is a wholesale distribution company of tool products that ships its products directly from India to the buyer in the US. Our client needed funding after the shipment left the port in India. He needed to keep his existing business separate due to the different model types and high growth potential of the new program of direct manufacturer to buyer.
Solution: Meritus provided a $1,000,000 A/R Factoring Line plus plenty of room to grow the line and provide the cash flow needed to increase his customer base and grow this side of the business. The company is now positioned for growth and can now target more contracts that we can finance.
Capital Needed to Fund Future Growth
Challenge: A CEO who formerly ran a $600MM operation had an opportunity to purchase a fairly significant janitorial company that was teetering on the brink of bankruptcy. The problem was that the current ABL lender wanted out and they needed the capital to buy them out and fund future growth.
Solution: Meritus provided a $500,000 A/R factoring LOC plus plenty of room to grow the line. Owing to our deep capital markets and M&A experience we had ability to understand the transaction and offer a structure that would enable us to leverage the appropriate target Accounts Receivable assets of the company being purchased. The company is now positioned for growth and can now target large contracts that we can finance.
Challenge: We were recently approached by an IT Staffing Company that was working with a bank that didn’t completely understand their business and growth prospects. Their line of credit was maxed out and the bank could not provide the capital they needed for current contracts, much less for upcoming government contracts that could require a six-fold increase.
Solution: Meritus provided an aggressively priced solution for a $6 Million A/R factoring LOC, not only to meet the current capital needs but to enable the CEO to negotiate larger government contracts for future growth. Meritus provided letters to the contracting officers verifying the capacity for our new client to execute on the contracts with our capital. Our experienced team provided a smooth transition for the government contract funding to balance out their cash flow needs.
Healthcare consulting group jumpstarted by funding
Our new client came to us looking for funding for an important growth opportunity. This company provides an invaluable service to both hospitals and patients by handling all the intake processes and paperwork associated with getting uninsured people coverage through government programs like Medi-Cal and SSDI. Already operating in three states, they had the chance to move into a group of hospitals in a fourth state; increasing their revenue substantially. All they needed to make it work was capital.
We were able to work through several challenges with the business—including a bank pay-off—and get them funded in time to ramp up their new operations in Minnesota.
Successful anesthesia practice uses funds to expand
A very successful Chicago-area anesthesia services company contacted us needing capital to expand their practice. They had tremendous growth opportunity, but were caught between covering the costs to add more doctors and the unpredictable payment cycle of insurance companies. Balancing the lag time between hiring a new doctors and having them start generating revenue was constraining the company. We analyzed the business and saw that it was an ideal fit to be one of our customers.
We then helped them coordinate a move to a bank familiar with the processes we needed in place to fund, worked through the intricacies involved with switching billing addresses on Medicare and third-party insurers, and were able to fund.
Fast funding keeps government contractor running
A government contracting client came to us in dire straits. The current bank funder was closing their line of credit because the company’s CPA-audited financial statements were extremely late. Their CPA and Accountant were in the process of getting these statements and reorganizing their back office, but had run out of time. This client was doing $750K – $1.5 mil a month in sales with future growth potential to $3-5 mil a month. They also had multiple partners and agreements in place along with UCC filings. We had to work through these challenges quickly so we could get them on board with new funding in place, satisfy their government contracts, and keep the doors open.
The Meritus Team immediately jumped into the situation with both feet, ready to work through all the obstacles and get to a solution. Our negotiation made the buyout with the other funder seamless. All additional paperwork, documentation, and transfer of required information was coordinated both swiftly and thoroughly by being sure the right players from both sides were involved at all stages of the process. This put the company in an even better position than when they started out. They are now successfully funding their business, anticipating growth from additional government contracts coming down the pipeline, and looking forward to expanding their business revenues and profits.
Our new funding client came to us as a start-up company. He had tremendous growth potential, but no access to working capital needed for recruitment, sales expenses, and payroll. Meritus provided the working capital and freedom needed to exponentially grow this company from zero to $7.2 million annual run rate within the first year. With an unlimited capital line and excellent customer service, this company continues to use our finance solutions.
Outside The Box Solutions
Our new staffing client signed our agreement immediately before Hurricane Katrina struck. In dealing with the aftermath of Hurricane Katrina, they faced numerous funding and customer service challenges. This company was desperately in need of an expeditious funding solution that included a significant degree of flexibility on our part. With a resourceful and agile team of professionals, Meritus worked through the challenges of doing business during this time. Our team funded the company with an “outside the box” solution enabling the payroll/financial and customer service obligations to be fulfilled despite Hurricane Katrina’s upheaval.
Growth & Security
After suffering several financial setbacks including a sharp downturn in revenue, seasonal cycles, and poor credit decisions, our new client returned to normal operations after acquiring our financial services. Meritus facilitated the growth of this company back to over $5 million per year. As a result of the exceptional customer service and financial resources we provided, this company experiences consistent growth and security regardless of seasonal staffing requirements.
Our client, one of the largest staffing companies in the US, was interested in acquiring the assets of a major regional competitor who was in bankruptcy. Our client had no previous experience in buying a company out of bankruptcy. Meritus was engaged to assist with the acquisition. We developed a 2 prong strategy: (i) maintain close personal working relationships with the work-out professionals and (ii) perform the due diligence before the company was even up for auction, as a result of which we were better prepared than the competition when the company was being auctioned. Our client succeeded in winning the auction and acquired the company through a Section 363 sale.
Our client, the majority owner of a major West Coast-based staffing firm, engaged Meritus to advise in recapitalizing the firm and buying out minority shareholders. After reviewing proposals from private equity partners, mezzanine lenders and other sources, we recommended a plan and funding source to our client. As a result, our client succeeded in his goal to be the 100% owner of the firm.
Our client won a new ‘on-site’ service program in a major US metro area but had no existing offices. After reviewing the options of organic growth versus acquisitions, we recommended our client acquire a mid-sized company to effectively service the client. Using a targeted direct marketing program to find “not for sale” companies, we created interest, fine tuned a list of potential candidates, and our client ended up purchasing a $10Million company in just over 2 months.
Financing Success Stories
These companies, as do many others, look to Meritus Capital to serve as a creative financial resource as well as a successful funding partner. We understand the needs of early-stage, high growth businesses. This greatly facilitates the forging of successful long-term financial partnerships.
$1MM Arizona Rural Hospital – Deal Done
A rural Arizona hospital had challenging cash flow issues and a recent change in CF0. In spite of this, Meritus still got the deal done – $1,000,000.00 – to improve operations and cash flow.