Janitorial and Hospitality Staffing, Connecticut, Receivable Financing

SITUATION

A janitorial and hospitality staffing firm runs into challenges with their profitable casino client being on Indian reservations and securing a factoring company.

In business since 2011, a fairly new but highly successful staffing firm out of Connecticut, works directly with several casinos providing janitorial and hospitality personnel.    The casinos doubled their contract with the staffing firm and  created the need for additional working capital.  The casino is on an Indian reservation which presents many challenges to a factoring company.   Factors must look at risk when analyzing a client and Indian reservations are governed by tribal law, not state or federal laws such as UCC rules.   Unfortunately with the increased risk most factoring companies will not deal with suppliers for Indian reservation owned corporations.

THE SOLUTION

One of Paragon Financial’s experienced sales people had a previous working relationship with the staffing company and dealing directly with the casinos.  Building on a several year history there was never even the smallest hiccup in the factoring arrangements.  This solid relationship coupled with a strong contract between the staffing firm and casinos, Paragon took on the staffing firm as a client and offered a receivable financing solution.

RESULT

Paragon was able to provide a $750,000 factoring line of credit to the staffing firm.  The receivable financing program kept their working capital at strong levels and maintained a healthy profit margin with the casinos.  All the while spending large amounts of cash to hire new janitorial and hospitality staff.   “Paragon Financial has the experience and capital to take on a large variety of clients with unique situations.  Not many factoring companies would have been able to take on a client such as this,” says Chris Curtin, National Sales Manager of Paragon Financial.

 



Texas Staffing Company – Government Contracts – Payroll Funding

Speedy Factoring Saves Staffing Company
Invoice Factoring for Payroll Funding

Client: A staffing company based in DeSoto, Texas, with many state government contracts

Industry: Staffing

Situation: In business for five years, the Company hit a growth spurt and began factoring with another company. Unfortunately, they fell behind on their payroll taxes and the IRS put a lien on their business. Their factor cut them off immediately, on a Monday. But, they had a huge payroll to meet on Friday, just five days away. They conducted an Internet search and called Paragon Financial. We found their track record with the other factor was clean and the dilution was very small. We agreed to help them out, but we had to move quickly.

The Challenges: We needed to get the IRS to subordinate their lien, but since we have extensive experience working with the IRS we knew there was no way that could happen inside of five business days. They usually need about a month and a half. But we knew where to turn for help and connected the Company with Tax Guard, a long-term partner of ours, to negotiate and work with the IRS. The Company already had a payment plan in place with the IRS, so Tax Guard felt confident they could get the subordination in the near future. Working together, we devised a plan for Paragon to monitor the payment plan with the IRS, and to pay the IRS directly out of their reserve.

In the due diligence process, Paragon found a second challenge – another lien from a finance company on a small loan. We had to work fast to get that lien subordinated too, but we still managed to meet our deadline that was just days away.

The Deal: A $500,000 invoice factoring line of credit.

Result: Paragon was able to get factoring in place in less than five business days and the Company met their payroll funding deadline on Friday, a critical component for their continued business.



Texas Company Gets Financing FAST – Payroll Issues – IRS Lien

Speedy Factoring to the Rescue

Client: A staffing company based in DeSoto, Texas, with many government contracts

Industry: Staffing

Situation: In business for five years, the Company hit a growth spurt and began factoring with another company. Unfortunately, they fell behind on their payroll taxes and the IRS put a lien on their business. Their factor cut them off immediately, on a Monday. But, they had a huge payroll to meet on Friday, just five days away. They conducted an Internet search and called Paragon Financial. We found their track record with the other factor was clean and the dilution was very small. We agreed to help them out, but we had to move quickly.

The Challenges: We needed to get the IRS to subordinate their lien, but since we have extensive experience working with the IRS we knew there was no way that could happen inside of five business days. They usually need about a month and a half. But we knew where to turn for help and connected the Company with Tax Guard, a long-term partner of ours, to negotiate and work with the IRS. The Company already had a payment plan in place with the IRS, so Tax Guard felt confident they could get the subordination in the near future. Working together, we devised a plan for Paragon to monitor the payment plan with the IRS, and to pay the IRS directly out of their reserve while the lien was in the process of being subordinated.

In the due diligence process, Paragon found a second challenge – another lien from a finance company on a small loan. We had to work fast to get that lien subordinated too, but we still managed to meet our deadline that was just days away.

The Deal: A $500,000 invoice factoring line of credit.

Result: Paragon was able to get factoring in place in less than five business days and the Company met their payroll deadline on Friday, a critical component for their continued business.



Start-up Staffing Company – Invoice Factoring

Paragon Financial Group (Paragon) announced that it has provided a $500,000 invoice factoring line of credit to a start-up staffing company. The financing will enable the Company to take on global contracts and expand.

The Carnel, Indiana-based entrepreneur is a current Paragon client who was opening a new business and needed factoring to establish themselves and grow.

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Raleigh North Carolina Security Guard Staffing

Financing Growth Through Factoring

Client: A Raleigh, NC area veteran-owned staffing agency providing unarmed security personnel.

Industry: Security Guard Staffing

Situation: The Company had won a $2 million one year self-renewing contract from the U.S. government to provide security personnel for the Mine Health and Safety Academy. These personnel would require high end security clearance, which meant higher pay, putting pressure on the Company’s cash flow. Their bank line of credit provided enough funding for their other endeavors but this project required all new financing, which the bank was not willing to provide. Without financing, the Company would have to pass on the contract and the chance for growth.

Solution: Paragon provided Accounts Receivable Financing with a  factoring line of $600,000.

  • The Company had never factored before, so Paragon worked with them step by step to ensure they were comfortable with the process.
  • Paragon worked with the Company’s bank to subordinate their lien on this contract, negotiating an agreement that was acceptable to both parties.
  • Paragon took care of all the red tape for the Company, working with the government contracting and disbursing offices to complete the proper paperwork and ensure the contract was officially amended.

Result: The Company received the necessary funding to take on the contract and expand. And, they now have the factoring foundation in place for any other contract they pursue in the future.

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Carmel Indiana Staffing Company – Payroll Financing

Paragon Financial Group has closed a staffing deal with acompany headquartered in Carmel, Indiana.Credit terms have been extended for an invoice factoring line that will help the company meet payroll and continue to grow in the their staffing business.



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