This consulting firm has been growing by acquisition.  They were with a factoring company and the relationship was satisfactory.  They received 85% of their eligible accounts under 90 days old.  The problem was that the factoring company was not approving all of their accounts giving them an effective 70% advance rate.  They claimed that these accounts were uninsurable.  EGC was able to give them 85% against all of their under 90 day accounts while taking secondary mortgages on the principals’ homes as back up collateral.  This is allowing the company to meet their current working capital commitments and continue to pay off several seller notes that they owe.  Moreover, by switching them into an asset based facility, their cost of funding was reduced by 25%.

This messenger service was a former client of EGC’s.  When they received a large private equity investment two years ago, they were able to pay off EGC.  The majority of that money was used to build out infrastructure so that the company could greatly expand.  They have grown 500% since then and are about to receive an additional funding from the original investor and two new ones.  In the meantime, their cash flow was tight and they used some spot funding to carry them over until the second funding closes.

This temporary help agency was asked to leave its bank of 12 years. Having gone through a recent internal shake up, its books and records would make it unattractive to a traditional lender. It had negotiated with another factor but was unable to come to agree on some key terms. Because EGC has years of experience, and its own in-house counsel, we were able to come create solutions instead of roadblocks and get the bank paid off on a timely basis.

This $50,000,000 turnaround was recently purchased by a private equity group. Despite extensive due diligence, management continued to uncover a variety of issues from the former owners. In fact, the problems were so extensive, that the asset based lender that originally proposed to provide financing, backed out upon performing its field exam. Not only was EGC ready, able, and willing to provide the working capital portion of this loan, but we were able to bring an equipment lender that brought additional capital to the situation.

This venture capital based business had experienced several of the ups and downs of an internet startup, having been founded in the 1990s. They created a new technology and recruited a new CEO to help transition the company. Until this technology could be marketed, the company was going to experience at least two more quarters of negative cash flow. The owners had two alternatives to finance these losses: 1) invest more capital and increase dilution, or 2) find a creative asset based lender that could understand their business model. EGC was quick to respond and came up with a formula that included more availability than any other lender was able to provide.

This public company had not borrowed against its receivables in years. As their orders were picking up, management was trying to decide on two options 1) sell more stock or 2) leverage their receivables. Since their stock was still trading near a 52 week low, they decided to pursue the borrowing course. Although they interview several sources, it came down to EGC and a bank. Even though the bank was less expensive, management and the Board of Directors approved the EGC line of credit based on the flexibility it offered. The bank loan also had several covenants that EGC did not require.

This profitable company had always been bank financed. When one partner wanted to buyout the other partner, they learned the limits of their long time bank. A friend suggested that they turn to an accounts receivable finance specialist. EGC had the deal funded in a week.

This company was asked to leave by its bank. Although it had been a client for several years, when a difficult 2007 created a loss that wiped out nearly all of the company’s net worth, they were asked to leave. The bank gave them three suggestions. This client chose EGC because they felt comfortable with senior management and knew of other success stories by EGC in their sector. As it turns out, the other lenders sent business development officers, whereas EGC’s owner went out to meet their management.

This client was asked to leave by its bank of several years after one year of losses. A dubious lawsuit also hung over the clients head that could threaten its future viability. EGC was referred to the client by its bankruptcy counsel to whom it was asking for advice. EGC reviewed the lawsuit and decided that the client’s position was valid and that the bank was merely looking for an excuse to exit the credit.

This client returned after several years of self financing. They were experiencing a great deal of growth and knew that it would take several months before it could get itself ready for bank financing. EGC closed the deal in two weeks. Because the client wanted bank financing, EGC structured the deal through its factoring division where there are no minimums or terms. This client can leave EGC without penalty once it is approved by a bank.

This company entered bankruptcy as its delinquent payroll taxes finally caught up with them. They had previously been financed by a hedge fund, who was no longer interested in the credit. Although there was ample collateral, the future of the company was uncertain due to the heavy liabilities created by the unpaid taxes. It was going to take a little time to figure out the best course. Because they were no longer interested in being financed by the hedge fund, EGC worked out a DIP financing that was acceptable to the pre-petition lender. As the company was able to sell off certain assets, the hedge fund was made whole.

This company was purchasing a competitor out of bankruptcy. It needed capital quickly due to the court restrictions. It was confident that it could get bank financing in a few months so opted for a quick factoring solution. They had their loan, and their new company, in days. They were so happy with the service that EGC provided that they opted for our accounts receivable lending program rather than pursue bank financing.

This company was being factored at a high rate. It was seeking additional working capital to keep vendors happy while they pursued their backlog. The factor had introduced them to a specialized inventory lender that promised them a $500,000 line. Two months and $10,000 later the inventory lender was only able to provide $250,000. EGC was able to reduce their accounts receivable borrowing costs by over 50% and supply the $250,000 for inventory. The added liquidity helped the company so much that their backlog actually increased as customers felt confident that they could now complete orders. The client came back to EGC to see how we could create more availability. We determined that the company and their real estate could support additional debt and made a third mortgage term loan.

This client had recently spun off from its partner. Because the spin off was a result of protracted litigation, the principal’s credit score deemed him “unbankable.” Although the initial amount of receivables was small, the principal projected tremendous growth, once he had the recent past behind him. EGC offered him an invoice discounting line that would grow with him despite his bad credit. The principal had once managed a $40 million company in the same industry. Instead of being blinded by a lack of recent track record, and a low credit score, EGC bet on management to lead this company to growth.

Due to the increase in construction spending in NYC, this firm had more jobs than money. Its bank of many years would not increase their line of credit. Although EGC rarely finances anything related to the building trades, because this was an 80 year old, third generation firm that came highly recommended by a trust worthy accounting firm, we offered an invoice discounting solution. After about six months, both EGC and the construction firm got used to one another and we offered him a revolver.

This hedge fund decided to start making asset based loans. It was looking for a high yielding safe way to create consistent returns for its investors. It had found a source for new deals that would be able to help put its capital to use. EGC spent a great deal of time explaining the industry to this fund and cautioned that with high rates comes real risks. Just because a loan is secured, does not mean that repayment is also secured. The hedge fund has now gone into lending with more discipline. EGC provides a variety of services to them. For example, EGC will determine the availability to the hedge funds clients, assist in collections and advise on deal structure. Meanwhile, EGC is invisible to the lending clients.