Discover how Global Aviation leveraged invoice factoring to reach new heights of business success with the help of Liquid Capital.
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You’ve likely experienced Global Aviation’s exceptional service from one of their customer service agents at one of the many North American airports they service.
Since its inception in 2009, Global Aviation has committed itself to providing high-quality airline staffing services for PAX (passenger, baggage and load control), cabin cleaning, aircraft detailing, ramp handling and mobility assistance. And with the help of Liquid Capital, the company has swiftly evolved into a top competitor in the industry.
However, when business really took off in 2016, Global Aviation sought additional financing. At first, the bank was able to provide enough funding, but as new heights of success were reached, so was the need for additional cash flow—which the bank could not provide.
Like emergency oxygen masks on an airplane, Liquid Capital has been there when Global Aviation hit funding turbulence, ensuring a soft landing by accessing $40 million since 2016 through invoice factoring, and ultimately helping them become bankable. Now, Global Aviation is ready for takeoff again in a post-pandemic world.
Unlocking the secret to funding business growth
While Global Aviation was able to withstand the cash flow crunch in its first few years—and even experienced modest growth—by July 2016 the company realized it needed additional financing if it hoped to achieve its growth objectives. At that point, its main funding option was self-financing, which was not an ideal situation for Carm Borg, President and CEO of Global Aviation.
“In this business, 90 percent of our costs are people-related. We have to make payroll every two weeks, but airlines only pay every 30 days,” says Carm, whose company offers a wide range of staffing services to airlines at airports across North America. “When you’re just starting out and ramping up quickly, it doesn’t take long to run into cash flow issues.”
After a business associate recommended Liquid Capital to Carm, he knew there was another way to discreetly gain access to the working capital he needed to continue the flight path to business success that the company was on.
The company entered a unique alternative funding arrangement with Liquid Capital that gave it access to more than $40 million in working capital funding over the following years—money that was primarily used to make payroll every two weeks. Unlike the line of credit that Global Aviation had through the bank, which was capped at $1.5 million, Liquid Capital provided funding against the company’s $4 million in monthly invoices and its equipment.
With the combination of invoice factoring and equipment financing/asset-based lending (ABL), the company was able to access the working capital it needed to keep growing. Understanding the need for discretion, Liquid Capital offered Carm the option of a non-notification factoring arrangement. In these kinds of arrangements, Liquid Capital operates in the background rather than collecting receivables directly.
This arrangement allowed the company to grow in Canada and the U.S. from approximately 550 employees in 2016 to a whopping 2,500 in 2018—and from 20 airline contracts to 55.
With the help of Liquid Capital, Global Aviation swiftly evolved into a top competitor in the airline staffing industry. As it continued to land new contracts, the company also planned to add new people—between 800 and 1,000 and grew its annual revenue from $6 million to $12 million. Because the company could now prove three years’ worth of strong financials, it could make this move forward with a newly obtained traditional bank line by the middle of 2018.
New altitudes mean new funding needs
However, by 2019, the company had once again doubled its revenues to over $24 million and its new bank line was unable to handle the rapid growth. So, in October 2019, Global Aviation returned to Liquid Capital and once again leveraged invoice factoring and ABL to help fund their upwards trajectory. “They gave me the ability to grow the business twice as fast,” says Borg.
On track to bring in $70 to 80 million by the end of 2020, Global Aviation continued winning awards and contracts, adding new employees almost weekly. “We were basically doubling our growth every year, continuously, and 2020 was going to be our best year yet,” says Borg.
Then, on March 23, 2020, about six months into its new arrangement with Liquid Capital, air travel came to a standstill as COVID-19 swept across the world.
While the pandemic affected every industry, it hit the aviation sector particularly hard. “We went to a bare-bones skeleton staff because there was minimal flight activity. It was basically survival mode,” says Borg. “Our goal at that time was to pay down our outstanding balance as receivables came in.”
Ready for takeoff when travel takes flight
Global Aviation has now weathered the pandemic storm and qualified for bank financing and government support so will be leaving Liquid Capital once again. “I’m sad to leave Liquid Capital, but we’ve survived the worst of the pandemic and are ready to stand on our own again,” says Borg.
When the world starts to travel again, and when the aviation industry takes flight once more, Global Aviation is well-positioned to continue its previous growth trajectory with the expertise, equipment and facilities ready for takeoff.