Birmingham-based Porter Capital has created an $8 million line of credit for a pandemic-hit firm, allowing the firm to remain in business.
The firm, described as “a $40 million service company” encountered cash flow problems because their payments from customers were delayed. They contacted Attract Capital LLC, a New York-based investment banker.
But Attract Capital couldn’t get a conventional loan for the firm.
David Barnitt, Attract Capital founder, suggested that the firm look for funding tied to its accounts receivable and suggested Porter Capital to handle the transaction.
Porter took on the project, extending an $8 million credit line secured by accounts receivable. That agreement allows the service company “to draw up to 90% of the invoice balance immediately” giving it “the ability to increase cash flow and fund growth without restrictive financial covenants.”
John Cox Miller, senior vice president of Porter Capital, said, “Attract Capital was instrumental in managing the client’s expectations, bringing them up to speed on how the financing works and keeping everyone on task to fund the credit facility. David and his team seemed to know exactly what we needed and managed an efficient process with the client. David also reviewed the credit agreements with the client and educated them on the importance of certain provisions necessary for an A/R lender. We are thrilled to gain a great client and fund one for our trusted partners at Attract Capital.”
Said Barnitt: “I am very excited to help my client obtain flexible, well-priced funding. I am also happy to have helped Porter, a leading lender, close this deal and gain a new, scalable lending relationship.”