How a 3 year old Minnesota energy company landed a 250,000 financing line of credit

A three-year-old energy company specializes in privately-owned commercial and residential renewable energy systems, providing design, engineering, installation, project management, equipment procurement and commissioning of the best alternative energy system for a given site. They offer turnkey services across the full range of renewable energy systems: wind, solar, biomass and hydrogen. The company signed a contract with a new client to engineer and construct a wind turbine field. While representing a large growth opportunity, the client also represented a 100% sales concentration, required extended billing and payment terms and as a young company itself, had a limited financial history. The contractual billing terms stipulated that the company could only submit sales invoices at quarter end which created 90 days of unbilled receivables. Additionally, the company had to wait another 45 to 60 days for the invoice to be paid according to the payment terms. This caused a significant cash slow crunch as the company had to meet payroll expense for dozens of its employees working on the project while waiting to be paid for up to 120 days. Their broker recommended they call an experienced factoring company. An experienced factoring company has the ability to help mitigate through the myriad of cash-flow issues of slow-paying clients along with the additional and specific challenges of the company. They should offer not only invoice factoring programs, but also provide payroll funding, purchase order financing, letters of credit and supplier guarantees. The approval process is quick and easy that can be set up in as little as 3 business days. In this case, the factoring company they found cleared several hurdles to get credit approval for the company’s client which had very little public financial history and didn’t want to release their financial statements. The factor patiently worked with the company and its client to obtain financial information for credit approval. The deal resulted in a 100% sales concentration, which required an iron-clad written verification from the client that the work had been done and they would pay the factor. Most factors won't touch a 100% concentration deal, especially with such a large amount on the line. With invoice factoring and the factoring line of credit, the company now has the working capital they need to fund payroll and has a reliable, stable source of funding to be able to take advantage of new opportunities to grow. They’re moving forward with their new client, designing and building the new wind turbine field.