BDC Capital Provides $1 Million Working Capital Line of Credit

Overview: A lumberyard and hardware store business with 5 locations and sales of approximately $70 million had operated profitably for numerous years. When the housing recession hit, the company, like many in the industry, faced the need to significantly downsize. The company successfully navigated this period and currently operates a profitable business from a single location that is once again growing.

Challenge: In April 2012, BDC Capital was approached by a banker who was evaluating the Company’s request for working capital. The company was rebuilding its business but lacked sufficient, historical profitability over the past two years to attract conventional financing. BDC Capital was familiar with the industry and felt comfortable in providing financing for this early stage turnaround.

Solution: BDC Capital responded by providing a $1 million asset-based, revolving line of credit for working capital. This fully-followed facility is collateralized with a first lien on A/R and inventory. The new working capital line has given the company substantial availability, allowing management to execute their plan of growing the business. The referring bank has landed a new client by providing lock box services and other banking services and was able to differentiate itself from its competitors by offering a viable solution to the company’s financing needs.

If you would like to explore ways to land additional business for your bank without taking on undue risk, give us a call at 781-928-1100 to explore how a partnership with BDC Capital can help.