The Company:

Founded in 2003, the Company is a privately owned distributor of raw and mixed ingredients to commercial bakeries and restaurants. The Company’s experienced team manages almost 2,000 SKUs to serve over 300 customers.

The Catalyst:

In 2009, the Company expanded into a new market, which required a greater investment of capital as the economic downturn lingered. In 2010, the Company’s revenues declined, resulting in a net loss for the year. No longer willing to provide working capital financing, the incumbent bank converted the revolving line balance to a term loan, leaving the Company without access to an ongoing source of financing.

The Solution:

Understanding is essential to designing the right solution. As soon as we received the referral, we met with Company management to learn about its operations, its customers, and its financing requirements. We moved quickly to structure and approve a $2.5 million revolving line of credit with advances up to 80% of eligible receivables. The new line paid off the $740 thousand bank term loan and gave the company additional borrowing capacity. The line is secured by the Company’s accounts receivable and inventory, with additional support provided by customized financial covenants and personal guarantees from Company principals.

The Result:

First Community Financial’s revolving line helped to restore critical flexibility and growth capacity to the Company. It is now poised for increased revenues and profits in 2011, and the management team knows that short-term financing is available when it’s needed. They also enjoy the benefits of a relationship, not just a transaction, with First Community Financial.

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