Case Study · Manufacturing
From losing their bank line to record growth
When its bank exited the relationship, this manufacturer needed more than replacement financing. It needed a capital structure built for what came next.
- IndustryManufacturing
- ChallengeBank exited + growth constrained
- SolutionAR Factoring + Bank Financing
- Facility$7.5 Million
- FundingSame day on eligible invoices
ACT 01 — THE CHALLENGE
The bank didn’t just leave. The line had been holding them back.
A manufacturer came to Bridgeport Capital after several years of rapid growth had been interrupted by a difficult stretch. A combination of operating challenges and declining financial performance put pressure on its banking relationship — and eventually, the bank made the decision to exit the relationship and terminate its revolving line of credit.
For a manufacturer that needed working capital to purchase raw materials, pay employees, cover production costs and fulfill customer orders, losing its primary source of liquidity created an immediate problem. But there was a bigger issue.
Even before it disappeared, the bank line had begun limiting the company’s ability to grow.
The manufacturer had opportunities to take on larger orders and new customers, but its borrowing availability wasn’t increasing quickly enough to support them. Management needed more than replacement financing. They needed a capital structure that could stabilize the business today and give them room to grow tomorrow.
ACT 02 — THE SOLUTION
We looked past the rough stretch — at the receivables
Bridgeport Capital looked beyond the company’s recent financial difficulties and focused on the strength of its accounts receivable, customer base and underlying business.
We structured a $7.5 million accounts receivable factoring facility that replaced the liquidity lost when the bank exited — tied to one of the company’s strongest assets: the invoices it was already generating.
Instead of operating within the constraints of a fixed bank line, funding availability could increase as eligible receivables increased. When the company won a large order or added a new customer, management no longer had to wonder whether the credit line had room.
Growth itself could help generate the working capital needed to fund more growth.
The immediate priority was restoring predictable cash flow. That liquidity helped the company:
- Purchase raw materials without disrupting production
- Meet payroll and operating expenses consistently
- Improve relationships with key suppliers
- Accept larger customer orders
- Pursue new business without being constrained by its former bank line
- ReceivablesThe invoices it was already generatingOne of the company’s strongest assets — a strong customer base and underlying business
- Bridgeport facility
$7.5 million AR factoring facilityReplaced the liquidity lost when the bank exited - Available capitalSame-day funding on eligible invoicesAvailability increases as eligible receivables increase
ACT 03 — THE NEXT STAGE
Bankable again — and they kept both
As operations improved and sales accelerated, the business began outperforming the levels it had reached before losing its bank financing. Revenue increased. The balance sheet improved. Eventually, the company became bankable again.
But this time, we didn’t simply send them back to a bank and disappear. Once the company’s financial performance supported traditional financing again, Bridgeport helped arrange a new $4 million revolving bank line of credit.
For many businesses, that would have been the end of the factoring relationship. This company made a different decision. They kept both.
The Results
Their strongest growth to date
- $7.5MAR factoring facility
- $4MNew bank line after the turnaround
- Same DayAccess to cash on eligible invoices
- RecordGrowth after restoring liquidity
The company went from losing its bank financing during one of the most difficult periods in its history to achieving its strongest growth to date — with the flexibility to take on opportunities based on whether they were good for the business, not whether there happened to be room on a credit line that day.
In the Client’s Words
“When our bank decided to exit, our biggest concern wasn’t just replacing the line of credit. We had worked hard to build this company, and we couldn’t afford to let a temporary setback determine where we went next. Bridgeport gave us the liquidity we needed when we needed it most. Eventually, we were strong enough to obtain another bank line — but we decided to keep our factoring facility too. Today we have the flexibility to take on opportunities we would have had to think twice about before.”
The Bottom Line
Losing your bank line doesn’t have to mean losing your ability to grow.
Sometimes the financing structure no longer fits the business. Our goal is to understand where your business is today, where you’re trying to take it, and what capital structure can help you get there — and when bank financing makes sense again, we’re happy to help you get there.
Let’s talk about your businessNo pressure. No obligation. Just a conversation.
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