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Wholesale Distribution Business Refinances an SBA Loan with a Traditional Loan

An entrepreneur owns and operates a company that distributes discounted health, beauty, and food products to retail stores and government entities...

Background

An entrepreneur owns and operates a company that distributes discounted health, beauty, and food products to retail stores and government entities. The New Jersey based company generated $15 million in revenue in 2007.

The Need

To service large government contracts, the company must purchase inventories in bulk. However, receivables from the distribution business's 200 retail clients accounted for about 60 percent of the company's total revenue. The distribution company wanted to ensure timely and secure payments from retail clients to maintain inventory purchasing power and cash flow stability.

Small Business Loan Solution

The client subscribed to D&B ' a leading source of commercial information. With the subscription the owner was able to'

  • Review and monitor business ratings and payment history of new and existing clients
  • Publicize payment history and good standing of company to generate new business
  • Establish business credit that lowered the cost of financing by around 200 basis points

In 2006, an entrepreneur used a 10-year to purchase a small business that distributes discount goods and beauty products. The loan put an all encompassing on the business, which prevented the company from raising financing