nFusion Capital, a provider of financing solutions to small and middle-market businesses, provided a $2.5 million asset-based lending facility to a Pennsylvania-based office furniture manufacturer. The flexible financing includes a $5 million accordion feature, which provides the liquidity and scalable capital needed to meet growing demand and fulfill the manufacturer’s robust order pipeline.
After experiencing a rush of large simultaneous orders, the company required additional working capital but had outgrown the funding capacity of its purchase order financing provider. With a strong history of financial performance and need for greater borrowing availability, they sought to transition to a traditional asset-based lending facility.
However, the company faced a unique situation that made banks and other commercial finance companies unwilling or unable to lend against its assets. The manufacturer has few repeat customers due to the infrequent replacement cycle of its products, and a book of business comprised of small to medium-sized companies, representing greater credit risks for lenders. Additionally, since each order is custom-crafted, the company does not carry ready-to-sell inventory. A business broker referred the company to nFusion Capital, knowing the firm’s reputation for funding complex transactions and having a collaborative, relationship-driven approach, where they take the time to understand a company’s unique situation.
nFusion Capital structured a $2.5 million asset-based lending facility with an accordion feature up to $5 million, leveraging its accounts receivable and inventory for maximum borrowing availability.
“The company needed a lending partner willing to look beyond the numbers and understand the quality of the assets they were lending against,” Brice Reid, senior vice president, business development at nFusion Capital, said. “We spent time with the owners to gain a deeper understanding of its customer base and better assess and manage any potential risks related to the collection of its accounts receivable. Additionally, we developed a creative structure for lending against inventory by considering the intrinsic value of the aluminum used in production.”
With this new scalable facility and stable funding partner in place, the company is now positioned to fulfill its expanding order pipeline, meet customer demand and confidently pursue long-term growth opportunities. The accordion feature also enables the company to double its access to capital without the onerous and time-consuming task of reapplying for an increase in the credit facility.
