Wintrust Receivables Finance (WRF) provided a $40 million accounts receivable line of credit for a well-established Midwest-based third-party logistics firm.
Over the previous year, the company had experienced a number of financial challenges brought on by a weak domestic transportation market. Multiple factors, including lower load count and margin compression, led to the company generating negative cash flow for over a year. This difficult situation was made worse by a relationship with a small local bank that was unable to provide the level of financial support required for a company of this size, and the incumbent bank’s lack of experience working with clients in the transportation industry.
The new $40 million WRF line of credit is more than double the size of its previous line. This new line of credit provided advance rates on both billed and unbilled accounts receivable, and a no-financial-covenant structure. The additional liquidity provided by the WRF line, combined with a no-financial-covenant structure, will give the company access to the liquidity and flexibility it needs to ride out the current transportation market cycle. In addition to the new line of credit, the WRF team is also providing a full suite of treasury management products and services.
“A combination of factors, including the difficult domestic transportation market, led to a liquidity crunch for the client, which we were able to solve for by providing a larger line of credit supported by the client’s accounts receivable,” John Marrinson, executive vice president of Wintrust Receivables Finance, said.
“Our team’s previous experience supporting the working capital financing needs of a number of companies in the logistics industry, over multiple industry cycles, gave us unique insight into the company’s near-term financing needs, and prospects for long term succuss,” Jason LeuVoy, national head of originations for Wintrust Business Credit, said.
