How Liquid Capital Helped One Company Navigate Financial Challenges with Invoice Factoring

How Liquid Capital Helped One Company Navigate Financial Challenges with Invoice Factoring

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One manufacturing company founded in 2003, enjoyed steady growth until the 2009 economic downturn. Despite winning a large contract from a major grocery retailer, the company faced a cash flow problem when a large Canadian bank pulled their line of credit, leaving them classified as « not bankable » by traditional banks.

Turning to Liquid Capital for assistance, it received quick cash through invoice factoring, with $1.2 million made available over the course of the contract. This funding helped it maintain operations and deliver on the big order. By 2024, the company regained bankable status and achieved sales growth, emerging stronger from the partnership with Liquid Capital.

Case Study: How Liquid Capital Helped One Manufacturing Company Navigate Financial Challenges with Invoice Factoring

Business goes in cycles. During good times, it can feel relatively stress-free. Then something unexpected happens and you now have some serious problems to solve. Let’s talk about how one company navigated the economic storm of 2009.

When challenges come, it takes more than vision. You need great relationships with people who are willing to spend effort to help you out.

Founded in 2003, the company enjoyed steady growth for its first 6 years, but the 2009 economic downturn brought challenges that threatened the business.

Cash Flow Hits a Wall

In 2009, the economic recession hit, forcing everyone to take stock of things and make some tough decisions. The company faced two options: cut costs and reduce their workforce, or take an aggressive approach to capture market share while competitors played it safe. The company chose the latter, increasing sales and overhead in hopes of capturing market share. It was a bold move, but one that’s helped lots of companies thrive during tough times when everyone else is bearish.

And the approach worked. They landed a big project from a huge grocery retailer. But it didn’t work fast enough.

« [The client] came through the door with good relationships, good business practices and a solid contract in-hand. He was clear about his situation and didn’t hide anything or make me guess. It made him an ideal client, and we were able to help. »

– Liquid Capital

As successful as they were, they had a cash flow problem.

To make matters worse, despite winning this huge contract, their bank pulled their line of credit. It wasn’t personal; it’s just how banks are structured. They lack the ability to handle non-standard situations.

The company’s efforts to restore their credit line failed, leaving them without necessary funds and classified as “not bankable” by traditional banks.

Ironically, it was now practically guaranteed money to continue operating via the large contract. And now they can’t get the funding to fulfill the contract and keep the doors open.

Timing is everything, and they found themselves out of time.

Invoice Factoring

Turning to another business bank in Canada for assistance, the company was directed to Liquid Capital. Here, Dan from Liquid Capital knew time was important. And he didn’t let the grass grow.

Dan handled initial research and underwriting within a month. Once this was done, they were set to receive funds within a day of sending out their invoice, making $1.2 million available through invoice factoring over the course of that contract. This immediate cash helped the company maintain operations and deliver on their big order.

And what’s more, once that initial underwriting was done, Dan could now buy any invoice under that contact, giving them cash the next day.

Process Overview:

Initial Assessment: Liquid Capital assessed their financial status and operations, and ran credit on the company’s customer.
Invoice Factoring Implementation: They began getting cash for their invoices. Cash flow improved the day after invoice submission.
Consultative Support: Dan helped them over many hurdles, offering strategic advice, based on their strengths to overcome other times of turbulence in the company.

Today, the Company is “Bankable”

Businesses run into cash flow problems either from bumps in the road or the need for rapid growth or both. And when banks can’t help, Liquid Capital offers cash flow strategies that don’t just get you by today, but position you for the future.

They did their part and kept their eyes on the larger vision. With the help of Liquid Capital, they were able to stabilize and become bankable by 2024.

Results and other milestones:

Reaching Operational Stability: The funding enabled the company to continue production, pay suppliers, and avoid mass layoffs during a critical period.
Navigating COVID: During the COVID-19 pandemic, they faced severe supply chain disruptions. The existing relationship with Liquid Capital allowed them to manage these challenges effectively, ensuring financial stability and operational continuity.
Recovering Financially: By 2024, they regained “bankable” status, meaning they’re easy for banks to lend to, partly owing to their sales growth. The partnership with Liquid Capital helped the company navigate financial instability and emerge stronger.

Insights and Recommendations

According to the company’s CEO, the keys to making his way through the difficult realities of business are the following:

Vision and Transparency: Maintain a clear vision for the business and be transparent with financials to build trust with financial partners. This transparency was key to their ability to secure necessary funding.
Persistence in Communication: Consistent communication with suppliers and financial partners is vital. Its persistence helped maintain supplier relationships and secure financial support.
Networking and Relationships: Building a strong network of relationships can provide crucial support during challenging times.
Consultative Financial Partnerships: Working with a financial partner who offers consultative support can turn business strengths into actionable financial solutions. Dan’s approach at Liquid Capital exemplified this, helping the company transform their financial difficulties into manageable challenges.

Vision Paints the Picture. Friends Make It Happen.

The company’s journey shows the benefit of strategic financial management and the value of strong partnerships.

Liquid Capital’s invoice factoring solution helped them overcome financial challenges and continue on a path of growth. Leadership, clear vision, strong relationships, and consultative financial support helped them navigate bumps in the road and get to a much stronger financial position.

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