When a Los Angeles paper processor needed cash, Summit created a $3mm facility using three sources of capital: A/R, inventory, & equipment. With several years of deteriorating finances, this 10 year-old manufacturer was unable to increase their bank credit line. The bank froze the company’s line, and asked them to exit, although the company was growing. A management change and bankruptcy filing several years ago left them with few choices for financing, yet the company had plenty of orders to fill.
Summit stepped in and created a structure that accesses capital from the company’s A/R, inventory, and equipment assets. Summit was able to evaluate, audit, and appraise the company’s financial situation condition and inventory within tight timeframes, allowing the company to realize additional financial incentives from the bank. Summit also stretched on advance rates and inventory financing in order to create enough availability to fulfill the bank’s obligations.
This financing allows the company to purchase inventory, repair equipment, and fill orders so they can grow. The bank was able to remove a special asset from their portfolio, and the company can return to traditional banking when they are ready.