Distributor of Frozen Organic Foods



Line of Credit Secured by Accounts Receivable and Inventory

Distributor of Frozen Organic Foods

The Situation: The Company had successfully built its frozen burrito business from scratch in 2009 and were located in the Northeast until 2013 when it moved its headquarters to Nashville, TN. Over the years, the Company built a reputation for high quality, organic frozen burritos, and meal bowls at affordable prices. By 2012, their products had solidified shelf space in Kroger, Publix, Costco, Sam’s and other large grocery chains and their product lines had expanded into frozen meal bowls and frozen entrees. They grew the business through outsourced production until 2017 when they opened a manufacturing facility and brought production in house. After sustaining two years of losses from the launch of their plant and the transition to a manufacturer, they were notified by their bank that their line of credit would not be renewed. The bank was located in the Northeast and could not support the Company’s transition and it had moved out of the market.

The Process: The Company’s management team sought out a local banking relationship now that their headquarters were relocated to Nashville. A commercial banker at a Nashville based bank met with the company and reviewed the credit request, but it was unable to approve financing due to the Company’s recent losses. The Banker introduced the Company to Southeastern in an effort to provide a solution for the company. By the time Southeastern received the request, the Company only had one month to get their line of credit refinanced from the existing bank. Southeastern was able to meet with management, provide a proposal for the line and get the loan closed and funded prior to the line expiration date. Furthermore, Southeastern tripled the Company’s line of credit as their borrowing base had already grown past the existing bank’s line limit and they needed the additional capacity for continued growth.

The Result: Because the Banker provided a solution to the Company’s financing needs, the Bank won the depository relationship and the Company now has a supportive local banking relationship, plus a line of credit with excess capacity to fuel their growth as they meet customer demand and development of new product lines. The Banker will keep an eye on the Company’s progress with the intent of participating in the line of credit after the Company stabilizes and becomes profitable. The result was a win for all parties involved.