$4.8M Working Capital Facility for a Regional Manufacturer

The company had operated profitably for over a decade, producing consumer goods for regional retailers across the upper Midwest. When a national big-box retailer offered a distribution contract covering 1,200+ store locations, the opportunity represented a step-change in the business — but the growth working capital requirements were immediate and significant.

The contract required purchasing roughly 3x their normal inventory volume. Supplier deposits totaling $2.6M were due within 45 days of signing. The first payment from the retailer wasn't expected for 120 days after initial shipment. Their existing bank line of $1.2M was already fully drawn against current operations.

The bank declined a line increase. Underwriting timelines for a new facility would take 60-90 days — longer than the supplier deposit deadline allowed. Without a capital solution, the company would need to decline the contract entirely or risk defaulting on deposit commitments.

The company met every supplier deposit deadline and shipped the initial retail order on schedule. The national retailer's first payment arrived at day 118 — two days ahead of projection — and the borrowing base self-liquidated by approximately 35% within the first collection cycle.

Over the following 12 months, annual revenue grew from $38M to approximately $53M — a 40% increase attributable primarily to the retail contract. Supplier relationships remained intact, and two additional suppliers offered improved terms based on the company's increased purchasing volume.

At month 18, the company's strengthened balance sheet and trailing-twelve-month performance qualified them for a $6.5M bank revolving credit facility at significantly lower cost of capital. The original facility was retired in full, and the company has continued growing through the bank relationship.