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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.

Sector

Transportation

Client Since

2015

Capital Funded

$1,550,000

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.

Our History

2015

Onboarding

Assessed historical financials, calculated DSCR, filed previous year’s tax returns.

2016

$15,000

Microloan to stabilize financials and carry receivables.

2017

$349,000

Refinance higher-interest loans, purchase equipment, working capital.

2018

$849,000

Major equipment purchase to double the fleet, open new revenue line, implement new technology.

2019

$1,200,000

Venture debt investment to once again double the fleet, consolidate new revenue line, no equity dilution.

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