Seasonal Agricultural Revenue
Case Overview
Reason: Gap Receivables
Funding Amount: $200,000
Approval: $200,000
Industry: Agricultural Orchard
Use of Funds: Inventory
Program Type: Bridge Loan
The Story
Erik Anderson sits down to give us a glimpse into an Agricultural business seeking a $200,000 bridge loan to fund them through harvest season. They needed a custom repayment plan that gave the business longer terms and prepayment incentives.
The Details
The Client
The client is an agricultural orchard based in Pennsylvania, specializing in seasonal crop production.
The business operates on a cyclical schedule, planting in the spring and harvesting in the fall, which results in seasonal cash flow fluctuations.
The orchard is co-owned by two individuals, each holding a 50% ownership stake.
The Situation
The client experienced difficulties securing funding due to the seasonal nature of their business, which led to cash flow gaps between planting and harvesting periods.
Initial attempts to obtain financing were unsuccessful, partly because only one owner was initially involved in the application process, while both owners' consent was required for approval.
The discovery of the second owner's involvement necessitated additional credit checks and documentation, introducing potential risks to the funding process.
The Solution
Capital Infusion facilitated an unsecured loan of $200,000 for the client, structured over an 18-month term with monthly payments, aligning with the client's seasonal revenue streams.
The loan agreement included early repayment discounts, offering the client financial flexibility and potential cost savings.
In the subsequent years, Capital Infusion provided additional funding, including a recent $60,000 loan, to support ongoing operational needs such as purchasing fertilizer.
The funding enabled the client to settle debts with vendors, thereby improving their credit terms and access to larger lines of credit for future operations.
Throughout the process, Capital Infusion managed the complexities of the client's ownership structure and seasonal business model, ensuring a tailored financing solution that addressed their specific needs.