Author: Patrick Aloisio

Case Study: Enhancing Cash Flow Efficiency in Construction

• Term: 9 months
• Use of Funding: Managing overdue receivables

Background

A thriving construction company with several high-value projects underway found itself hindered by a common industry challenge: an extensive accounts receivable ledger. With significant sums tied up in unpaid invoices, the company faced cash flow constraints that threatened to stall its ongoing and future projects. This situation not only jeopardized the timely completion of current jobs but also limited the company’s ability to pursue new opportunities in a competitive market.

Challenge

The primary challenge was the lag between billing and payment collections, a gap that often extended for months. This delay in receiving funds put considerable strain on the company’s operational finances, affecting its ability to cover day-to-day expenses and make strategic investments. Traditional loan products were not suitable due to their lengthy processing times and inflexible terms, which did not align with the company’s need for quick and adaptable financial solutions.

Solution

MobyCap provided a tailored solution through a flexible merchant cash advance of $600,000. This funding mechanism was specifically chosen for its suitability to the construction industry’s financial rhythm. The merchant cash advance allowed the company to access the needed funds promptly, without the typical constraints of traditional loans. Furthermore, MobyCap included an innovative feature in the financing agreement—a discount for early payoff. This incentive was designed to reduce the overall cost of capital, offering the construction company a way to save money if they managed to settle their receivables ahead of schedule.

Impact

The immediate availability of funds drastically improved the company’s cash flow situation, allowing it to cover operational costs and continue with project timelines uninterrupted. With their financial footing secured, the company could also focus on finalizing projects and moving receivables, which improved their liquidity faster than anticipated. The early payoff discount further incentivized the company to manage its finances more efficiently, resulting in savings on interest payments and a stronger balance sheet.

Conclusion

This case study demonstrates the effectiveness of a merchant cash advance in the construction industry, where cash flow timing can significantly impact business operations. By providing a quick, flexible, and cost-effective funding solution, MobyCap helped the construction company navigate a challenging financial situation, enabling continued growth and efficiency. The success of this financial strategy underscores the value of tailor-made funding solutions in managing industry-specific financial challenges.

Case Study: Overcoming Credit Hurdles for Healthcare Expansion

Term: 10 months

Background

In the competitive landscape of healthcare services, a privately-owned practice demonstrated remarkable success and a strong commitment to patient care. Positioned for growth, the practice identified an opportunity to extend its reach and services by opening a third location. However, despite the clear path for expansion and the practice’s established success, financing this growth proved challenging. Traditional lending avenues were obstructed by personal credit issues faced by the practice’s owners, threatening to stall their ambitious plans.

Challenge

The primary obstacle was the stringent requirements of traditional banks, which heavily weighted personal credit history in their lending decisions. This practice, despite its proven track record and positive operating history, found itself at a critical juncture. The need for an alternative financing solution was clear, as the practice sought to navigate around the barriers imposed by conventional banking constraints and seize the timely opportunity for expansion.

Solution

Enter MobyCap, a financial partner known for its flexible and innovative approach to funding. Understanding the unique challenges faced by healthcare practices, MobyCap evaluated the practice’s application through a broader lens. By considering key operational data points beyond just credit history, such as the practice’s consistent growth and positive cash flow, MobyCap recognized the practice’s potential for further success. This comprehensive assessment allowed MobyCap to extend a $250,000 advance, specifically earmarked for the establishment of a new office location.

Impact

The infusion of capital from MobyCap was transformative. Within the 10-month term of the funding agreement, the healthcare practice not only successfully launched its third location but also began seeing a significant increase in patient volume. This expansion enabled the practice to offer its high-quality healthcare services to a wider community, reinforcing its position as a leader in the healthcare sector. Furthermore, the successful opening of the new location underscored the viability of alternative financing solutions in overcoming personal credit challenges, opening the door for future growth opportunities.

Conclusion

This case study highlights a pivotal moment for a healthcare practice, where the right financial partnership enabled it to overcome traditional lending barriers and achieve significant growth. MobyCap’s role in facilitating this expansion demonstrates the potential for specialized financial solutions to empower healthcare providers, ensuring their ability to serve more patients and contribute positively to community health outcomes. The practice’s successful expansion serves as a testament to the value of innovative financing approaches in the healthcare industry.