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.
- 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.