Challenge: An IT staffing company that specializes in providing very skilled programmers to large consulting firms had outgrown their bank line of credit. Due to the lack of working capital, the company was unable to revolve the line of credit, and they also could not meet their payroll tax obligations. This cash flow challenge is common in growing staffing firms where they can’t keep ahead of their obligations. Ultimately, the IRS filed a lien against their assets. Their bank referred them to our team.
Funded: We were able to negotiate with the IRS and get a subordination of the A/R. We also worked with the bank to pay down the majority of the line of credit and the bank termed out the remaining portion. Invoice factoring allowed the company to continue to grow but also satisfy their debts. Today this company is completely self funded.