Allied Affiliated Funding provided $1.5 million in receivables financing to a New Jersey-based pet wash manufacturing company and $300,000 in debtor-in-possession receivables financing to a Texas-based manufacturer.
The pet wash manufacturing company sells primarily dog washing stations to national pet retailers.The company launched in 2019 and was being funded by an affiliated entity. In addition to its limited operating history, the company experienced losses as it initially outsourced some of its manufacturing but then suffered vendor quality challenges. Management brought everything in house afterwards to ensure solid quality standards in the future.
The startup nature of the business, financial losses and new orders created a cash flow need that required a financing partner that could help with the company’s immediate working capital needs and growth. The owners approached Allied for help, and Allied set up a new facility that included both domestic and Canadian-based customers. The funding by Allied provided sufficient cash flow for the company to accept new orders, alleviating financial pressure from its affiliated entity.
The Texas-based company is a manufacturer of lead and steel-based specialty items such as valves, gauges, lead roof flashing, brass fittings, pipe, castings, washers and related items for the industrial, roofing, plumbing and medical industries,
The company had been bank financed since 2017 following an acquisition. The business was impacted by Hurricane Harvey and then later by a plant fire, which resulted in losses. The company’s bank lender asked the company to seek a new financing provider in early 2019.
Unable to refinance the debt and with its bank sweeping all collections to its line, the owner injected personal funds to manage the business and cover payroll. Realizing that the continued lack of capital availability would continue, the company eventually filed Chapter 11 in mid-2019, and the business has continued to operate in bankruptcy with limited capital to take on new orders.
Once the bank assigned a new workout officer, that banker referred the transaction to Allied. Allied proposed and funded a DIP factoring facility to help with the company’s working capital needs, giving the company the ability to accept new, larger orders. In addition to gaining the ability to accept these larger orders and new customers, this funding by Allied will enable the company to emerge from bankruptcy in the near future.
Allied Affiliated Funding, a division of Axiom Bank, specializes in factoring and ledgered asset-based lending. It provides credit facilities, including accounts receivable financing, inventory, equipment, real estate and term loans.