Improve Borrowing Capacity
Corrugated box equipment manufacturer located in New Jersey was having difficulty financing export sales because lender excluded all foreign receivables from borrowing base. Credit insurance was the solution. The lender agreed to include foreign A/R in the borrowing base because the risk of non-payment / collections was reduced. The result was increased availability which allowed the borrower to continue to grow export sales.
Electromagnetic coating company located in Georgia need additional working capital to support domestic sales growth. The financing need was driven by longer terms of sale being offered to their larger customers. Their lender agreed to increase the advance rate on receivables if insured.
Export sales: $3,000,000
Average export A/R: $575,000
85% advance rate: $460,000 additional working capital
Annual policy cost: $12,000
Total company sales: $20,000,000
Average domestic A/R: $2,500,000
85% advance rate: $2,000,000
Annual policy cost: $23,000
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