25. August 2010 04:48
Today we are going to begin a series in our blog on How We Help. Occaisionally, over the next weeks and months I will post articles and comments from our clients on how Crestmark was able to help them with their specific needs. Today’s example is from a Staffing company on the east coast.
The company is a very well known and respected temp medical staffing company located on the East Coast. They provide a variety of medical professionals including LPN’s, RN’s and physical therapists to hospitals and nursing homes.
They began to see significant decrease in their business from about June 2008 through January 2009. The leadership took very proactive steps to reduce their overhead and business expenses, a process which they continue to do. Due to management taking an active role in managing to a new sales forecast they have begun to turn the corner and are projecting a breakeven 2009. Leadership felt strongly that they could post positive net income during 2010.
Their previous lender became nervous about the relationship after they experienced 50% drop in sales from the previous year. The losses caused their lender to become very restrictive with their credit facility and availability as well as imposing some very strict financial covenants. This put the company in a very precarious position; they had a drastic drop in business, they were experiencing longer than usual turn on their receivables, and their lender was restricting their credit line.
They first came to Crestmark in June, 2009. The client said he knew from day one talking with Crestmark, that we were different than the other companies he had spoken with.
We were able to quickly review and provide them with feedback on what we would be able to do for them. Our solution was an AR Loan with an available credit limit that would give them more than adequate cash flow and some very welcome breathing room. In addition we offered a 90% advance rate which was more aggressive than the previous lender, the new relationship was completed by the previous lender’s deadline
All of this has allowed them to continue to make necessary improvements to processes and expenses while being confident that they have a lender who will be there with them step by step to bring them through difficult times and ultimately to profitability once again.