$1,000,000 Revolving Line of Credit


The Business

The company is an importer and distributor of plumbing and electrical fixtures based in the Southeast. The two principal owners started the business out of a garage while they were in college and haven’t looked back. Since the company’s inception, the business has experienced continued growth in sales and its customer base.  

The Scenario

With the help of two minority investors, the founders were able to get approval for a line of credit from a local bank to satisfy their financing needs. Over time, the bank’s credit criteria began to change, and the company found that its line of credit did not fall within the new guidelines. The owners came to realize that they were in a tough place. The business was too large for a small business loan, yet too small for a bank’s ABL group.

The Solution

The incumbent bank referred the company to VCF; a financing partner who could creatively satisfy the company’s unique situation. Through continued communication and personal visits with the company, the VCF Team ensured that they knew every aspect of the business. The principals decided to move forward with signing a proposal letter due in large part to VCF’s perseverance and understanding of the company’s needs. While the previous bank required personal guarantees from the two outside investors, VCF did not, which was a further testament to VCF’s confidence in the main principals. The agreement was made on a revolving line of credit for $1,000,000 with both accounts receivable and inventory serving as the collateral, providing the company with additional flexibility to seek out new business opportunities.

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The Result

Supported through the relationship with VCF, in a year’s time, sales have nearly doubled and VCF has supported the growth through an increase in the line by 50%. Additionally, VCF has worked with the company to access new business connections, provide business consultation, and offer advice on internal accounting systems. As the needs of the business will continue to grow and change, VCF will continue to serve as a supportive partner. VCF has provided the company the ability to seek additional sales opportunities that would otherwise not have been possible.