SouthStar Capital provided a $2 million invoice factoring facility to a Maryland-based specialty contractor, replacing a bank line of credit and providing additional working capital to support a project pipeline exceeding $20 million.
With less than two years in business, the contractor found that traditional financing limited its access to the capital needed to keep pace with rapid growth. Its existing bank line could no longer adequately support the payroll, material purchases, and supplier payments associated with its expanding workload.
SouthStar structured an invoice factoring facility to pay off the bank line and allow the company to convert eligible outstanding invoices into working capital. The larger facility gives the contractor greater financial flexibility to execute on its project pipeline and pursue additional opportunities.
“An established bank line can be a starting point, but a growing contractor’s working capital needs can quickly exceed that capacity,” Scott Norris, senior business development officer at SouthStar Capital, said. “By replacing this company’s bank line with a $2 million invoice factoring facility, we are providing the flexibility needed to support its growth and execute on its project pipeline.”
