Republic Business Credit extended a $1 million factoring facility to an independent children’s book publisher that lost funding from a traditional bank. The publisher needed to find a lender to support its turnaround plan and sought a partner that understood the publishing industry. The working capital provided allowed the company to make timely royalty payments and fund payroll even when key customer payments were delayed due to extended payment terms.
The Illinois-based company, which has been in business for more than 100 years, publishes middle grade fiction, picture books and young adult novels. Diversity, equity and inclusion is at the core of this company’s mission, and it is proud to publish books that promote empathy, inclusion and personal responsibility in the next generation. The company’s customers include the those in the trade, education and library industries.
While the company was historically profitable, it began facing industry-wide difficulties that led to a decline in revenue. To compensate for the unexpected shift in profitability, the company successfully sold one of its business lines. However, after the sale, its previous bank was no longer willing to support the company.
The company was still required to make significant, semi-annual royalty payments, even with payments coming in slowly from key customers. The company had utilized the expertise of certified turnaround and restructuring consultant KFK Advisors to develop its turnaround and restructuring plan. KFK’s managing partner and established turnaround professional, Kevin Kelly, referred the company to Republic.
Republic’s funding provided the liquidity solution for the royalty payments in addition to working capital funding for the company, as it is paid up to 120 days after sale by select customers. Republic also provided an 85% advance rate. This funding solution ultimately will allow the company to focus on its business and will support its turnaround plan in 2023 and 2024.
“We are confident our recourse factoring facility will help this business by providing liquidity to manage their operations,” William Kemp, senior vice president and Republic, said. “We are happy to help an independently-operated business in the Midwest that provides important educational materials to so many key age groups.”
“Turnaround consultants, Kevin in particular, allow us to partner with companies that we might not otherwise be able to support,” Robert Meyers, president of Republic, said. “Kevin Kelly is a great advocate for his clients, understands their businesses and tends to help across their various financial, accounting, operational and people development needs.”
