CASE STUDY: MANUFACTURING II

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Our client manufactures zippers for large public organizations, especially the Armed Forces. Originally from China, he has been in business for 25 years. Gross sales dropped from $6 million in 2008 to $3 million in 2013 due to increasing restrictions on government purchases and equipment malfunctions. In 2013, our client began doing the research to offshore his manufacturing facility to China.

GOALS

  1. Develop strategic plan to keep manufacturing in the US.
  2. Purchase new equipment with higher production capabilities.
  3. Streamline manufacturing processes.
  4. Optimize supply chain management.

CAPITAL REQUIREMENTS

$220,000 in a bridge loan against outstanding invoices and $600,000 commercial line of credit for equipment purchase.

ACTION PLAN

  • Preparation of 2013 interim financials.
  • Submission of loan package for $220,000 bridge loan.
  • Preparation and submission of loan package for $600,000 commercial line of credit.
  • Developed and implemented Debt Service Coverage (DSC) Ratio.
  • Monitor monthly Profit & Loss Statements in accordance with DSC Ratio.

OUTCOME

A bridge loan of $150,000 approved. A commercial line of credit approved for $600,000 at 4.775% with an amortization period of 10 years and adjustment period of 4 years. Purchase and implementation of new equipment and manufacturing workflows to increase production capacity by 20% and production costs by 6%.

We’re also happy to report, the manufacturing facility remains in the US.

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