Startups

The Obstacle

For most startup companies, sales growth is priority number one. But what many don’t anticipate is that a big boost in sales can quickly lead to a big shortage in working capital. That was the case when one start-up manufacturer’s product started to take off. Sales were on the rise and the company was thrilled with the early success. But excitement quickly turned to concern as the company realized its instant success meant that more funds were needed to keep pace with its rapid growth in product demand. That left little to no working capital to meet day-to-day business expenses. It wasn’t long before the company started running out of money. The owner turned to a bank for help, but was quickly declined because the business was less than 5 years old.

The Solution

The company’s owner reached out to OCF. Our team took the time to understand the unique strengths of the business, including its strong product demand and sales growth. We focused on the credit quality of the company’s customers rather than its cash flow. Plus, we understood that with a startup company, we were underwriting the future of the business, not the past.

Working in partnership with the company’s owner, we created a working capital solution that met the immediate needs of this fast-growing start-up, while building in flexibility to adjust and grow with its future sales and success.