Professional Services
IT staffing and consulting firm providing contract technology resources to enterprise clients
Case study
$600K Bridge Capital During Contract Transition
A short-term bridge facility that enabled an IT staffing firm to retain its full consultant bench during a 60-day revenue gap between a lost client and a larger new engagement.
~$8M
Established firm with 40+ active consultants placed across Fortune 500 and mid-market accounts
$600K
Short-term bridge facility covering payroll and benefits during 60-day contract transition gap
4 months
Facility deployed in 8 days; repaid from first 3 months of new contract collections, ahead of schedule
Contract Bridge
Repayment aligned to projected billing schedule from signed engagement letter
Zero Consultant Attrition
New contract exceeded projections 15%; facility repaid early; client base diversified within 12 months
Situation
The biggest risk in staffing isn't losing a client — it's losing your people in the gap.
The company had grown steadily over seven years, building a bench of 40+ specialized IT consultants placed at enterprise accounts across the mid-Atlantic region. Their model was straightforward: recruit specialized talent, place them on long-term engagements, and bill hourly with weekly invoicing. Revenue was consistent and margins strong — until their largest client, representing approximately 25% of total revenue, terminated their master services agreement with 30 days' notice following an internal restructuring.
Simultaneously, the company was in final negotiations on a new engagement with a larger enterprise client — a 24-month managed services contract that would more than replace the lost revenue. The engagement letter was signed within two weeks of the termination notice. But the new client's start date was 60 days out, and billing wouldn't begin until consultants were on-site and working.
The math was unforgiving: 40+ consultants expected biweekly paychecks plus benefits, totaling approximately $280K per payroll cycle. The lost client's final invoice payments would cover roughly 30 days. After that, the company faced a 60-day gap with full payroll obligations and no corresponding revenue. Their bank declined a line increase, citing the client concentration loss as increased risk — despite the signed replacement contract being larger.
Letting consultants go would save cash but destroy the company's ability to staff the new engagement. IT consultants with specialized skills don't wait — they'd accept competing offers within days, and the company would spend months rebuilding capacity it took years to develop.
Structure
Underwritten against the contract ahead, not the client behind.
We structured a $600K short-term bridge facility underwritten primarily against the signed engagement letter and projected billing schedule from the new contract. The repayment structure was aligned to the first three months of new contract collections, creating a defined self-liquidating path that didn't depend on any other revenue source.
- Facility amount: $600K covering approximately 4.3 payroll cycles (60 days of consultant compensation plus benefits and operating overhead)
- Deployment: Full amount available within 8 days of engagement; draws permitted as needed against payroll schedule rather than lump-sum advance
- Underwriting basis: Signed engagement letter from new client, projected billing schedule (hourly rates × confirmed headcount × projected utilization), client's payment history and credit profile
- Repayment: Structured against first 3 months of new contract collections; projected to fully amortize from new engagement billing alone
- Term: 6-month maximum term with early repayment without penalty; expected repayment within 4 months based on billing projections
Outcome
Full bench retained. New engagement delivered from day one.
The company made every payroll obligation on time throughout the 60-day gap. Not a single consultant was lost to attrition. When the new engagement start date arrived, the company deployed a full team of 38 consultants on-site on day one — a staffing speed that the client later cited as a differentiator versus other vendors who typically require 4-6 weeks to reach full headcount.
The new contract exceeded initial billing projections by approximately 15% as the client expanded scope within the first month. Collections from the new engagement began at week 3 (the client paid on net-15 terms, faster than the net-30 that had been modeled). The facility was repaid in full by month 3.5 — ahead of both the projected 4-month timeline and well within the 6-month maximum term.
Over the following 12 months, the company used the new engagement as a platform to diversify its client base, adding four additional accounts and reducing maximum client concentration from 25% to under 15%. The bank that had declined the line increase subsequently approved a $1.2M revolving line of credit based on the company's improved revenue profile and reduced concentration risk. The company's revenue has grown to approximately $11M.
Losing a major client while winning a bigger one — 60 days of overlap that could have broken the business. We bridged it.
Related
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