A commercial construction firm came out of a slow winter with a strong pipeline of new jobs and a solid backlog to work through. The season had drained its cash, though, and the new projects needed money up front. With only a short window to find it, the firm needed a fast answer.
Vision
The firm wanted to keep its growth on track by saying yes to every good project in the pipeline. Passing on work or pushing start dates back would have cost it momentum going into its busiest season.
Opportunity
The outlook was strong and the work was lined up. A well-timed injection of capital would let the firm start the new projects without waiting on revenue still to come.
Challenge
Winter Cash Crunch
Winter is always a tough stretch for construction firms. Working capital was stretched thin just as the new projects were ready to start.
Two-Week Deadline
The firm had about two weeks to line up the funding or face a hard choice between turning down good projects and delaying work that could grow the business.
Limited Lender Appetite
Many lenders see construction cash flows as volatile and treat the industry as high risk, which narrows the options for a firm on a deadline.
How Fora Financial Helped
A Fora Financial partner already working with the firm made the introduction, and the team secured a $2,000,000 senior facility in under three days. It was structured to bridge the gap and support labor, materials and other upfront costs for the new projects, so the firm didn't need to bring in a new primary lender.
Results
Projects Moved Ahead
The firm took on the new work without turning down good projects or delaying jobs.
Growth on Track
With the funding in place, the company is on pace to top $100 million in annual revenue.
ABL Next
The firm will use funds from its $5 million asset-backed facility to take out Fora Financial's position and reduce its total cost of capital through the prepayment discount.
Conclusion
A firm with a strong outlook and a short window got the liquidity it needed without giving up any of the work in front of it.
Why Fora Financial
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Speed
Fora Financial moved fast, which was the deciding factor for a firm working against a short deadline.
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Custom Financing
The financing was built to work for construction companies and the way their cash flow rises and falls.
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Early Payment Discounts
Unlike other lenders, Fora Financial gives discounts instead of penalties when clients pay ahead of schedule. When the busy summer season brings in cash from completed projects, the firm can pay back early and keep more of its profit.