Staffing Company - June 2017

Karen Small

Location: Grandville, MI
Industry:Staffing Firm
Revenue: $3 Million
Line of Credit: $400,000 Factoring Facility
Collateral: All Assets of the Company

The American Dream
The American Dream Sterling recently closed a new staffing company in Grand Rapids, Michigan with annual sales of $3 million and open accounts receivable of $305,000. The opportunity came from a smaller factor located in North Carolina. The customer had recently grown larger than his maximum lending limit and the North Carolina factory had successfully referred other clients to Sterling with great success.

The Grand Rapids staffing company specialized in light industrial, assembly and clerical staff. With 21 customers serving the greater Grand Rapids marketplace. The company's due diligence identified an old tax lien from 2010 - 2015 with past due taxes owed to the IRS of $240,000. The large tax liability can be a significant risk to a Bank or Asset Based Lender should the tax authority levy the accounts receivable and place the Bank or Asset Based Lender in second place behind the taxing authority.

Sterling was able to successfully negotiate a tax installment plan with the IRS Agency which secured Sterling and maintains a first security position in the accounts receivable. Sterling is required to confirm the current tax remain paid and that the monthly installment payment of $1500 is made every month. Those added controls allowed the owner of the staffing agency to save over 30% of his expenses each year by transferring his business from the small ticket factor to a larger Asset Based Lender with lower cost of funds.

Karen Small
Partner - Sales and Marketing