Challenge: Because of how quickly the staffing company was growing, their financials were not in line with what it took to secure a conventional loan. Whenever a debtor was late paying an invoice, it put the security staffing company in a situation where they couldn’t make payroll, which made them turn to high interest MCA loans. They did not know about factoring as a type of funding.
Funded: Their banker saw the debt the staffing company was in and referred them to Catalyst. Instead of using an MCA loan, it was a much better fit to use invoice financing to meet any shortfall in cashflow. The savings to the company using factoring instead of MCA loans was more than $100,000.
Multiple MCA loans totaling $410,000 to be repaid over 9 months
$140,000+ in fees
Factoring Cost for $410,000 over 9 months
$36,900 in fees
Savings of $100,000+ to client