Industrial Tooling

toolsheader

$1,000,000

Accounts Receivable and Inventory Line of Credit

Industrial Tooling and Supply Distributor

The Company was founded in 1983 and is headquarters in East Central, AL. They are an industrial distributor specializing in cutting tools, abrasives, hand tools, power tools, as well as other general line industrial supplies. The company is known for their technical capabilities and supporting their customer base with value added programs that include: vendor managed inventory, documented cost savings, vending machines, fluid management and consigned inventory on commodity contracts.

A well established Community Bank approached Southeastern about this existing Bank customer. The Company had experience a financially disappointing year in 2009, but was experiencing a turnaround so far in 2010. The customer needed an increase in their current line of credit in order to support the turnaround and projected 2010 sales growth. However, due to the company’s loss in 2009, the Bank could not increase their credit line.

After the Bank and Southeastern assessed the situation, it was determined that there was sufficient collateral available to support an increase in the current line of credit. A solution was formulated in which the Bank could keep their current exposure of $600,000 or 60% of the line and Southeastern would provide an additional $400,000 or 40% of the line.

Result
  • This turned out to be a win-win for both the Bank and the customer. The Bank was able to provide the additional working capital the company required and therefore accommodate the customer; at the same time improving the regulatory rating of the credit.
  • The company was able to get the additional working capital needs to handle positive growth in 2010 and to pursue additional business.