Case Study
Transportation company founded in 2011.
Milestones include re-structuring the corporation/assets to reduce liability and distribute risk, the preparation and submission of tax returns for 2016-18, implementation of accounting package, development and implementation of Debt Service Coverage Ratio (DSCR), implementation of logistics package.
Our client is a minority-owned transportation company. After driving as an owner-operator for 20 years, he began his own company in late 2011. Unfortunately, it takes heavy cash outlays to get trucks on the road and he was undercapitalized at launch. Bootstrapping with savings and personal credit got him through the first few months. Revenues surged. Then mechanical failures hit and his cashflow was impacted. An alternative lender provided a high-interest loan, which established a cycle of negative debt that lasted 18 months: increase in revenues went to pay the debt which exacerbated cashflow forcing him to borrow again. Upon beginning our engagement in 2015, we facilitated a microloan of $15,000 to stabilize cashflow without resorting to high-cost loans. In 2017 we facilitated an SBA-guaranteed loan of $450,000 to consolidate outstanding loans and purchase four new trucks, and in 2018 a further $817,000 to increase the fleet by another five trucks. From a one-person operation in 2011, the company grew to 14 trucks and 19 employees by the end of 2018.