In late 2017, a non-medical in-home care provider faced a significant opportunity and challenge. Awarded a contract by the Veterans Administration (VA) to deliver in-home after-care to veterans, the provider needed to hire a dozen qualified employees and manage payroll until the VA paid their invoices. With NET-30 payment terms and payroll every two weeks, the company, only six months old with limited revenue and no commercial credit history, was in a tight spot.
The in-home care provider needed immediate funds to cover payroll for new employees while waiting for invoice payments from the VA. The tight payment terms and lack of commercial credit history made it difficult for the company to sustain operations and capitalize on the VA contract.
SouthStar Capital provided a $250,000 Payroll Funding program to bridge the gap. This program enabled the business to cover the initial payroll cycle and every subsequent cycle. The first set of invoices submitted for funding amounted to less than $4,000. SouthStar Capital advanced 85%, depositing approximately $3,300 into the payroll account the next day.
The Results:
- Sustained Operations: The Payroll Funding program ensured the company could meet payroll obligations, allowing them to hire and retain qualified employees.
- Stabilized Cash Flow: Immediate access to funds smoothed out cash flow, enabling the business to operate without financial strain.
- Growth and Expansion: Over seven years, the company grew significantly, now boasting a staff of 50 employees, generating over $100,000 per month, and operating offices across the United States.
- Long-term Partnership: The Payroll Funding solution not only sustained the business initially but also supported its substantial growth and expansion, making the company a valued client of SouthStar Capital.
With SouthStar Capital’s $250,000 Payroll Funding facility, the in-home care provider successfully navigated their cash flow challenges and positioned themselves for long-term growth. This case underscores the impact of tailored financing solutions in helping businesses overcome initial hurdles and achieve sustained success.
At SouthStar Capital, we offer flexible financing solutions like Payroll Funding to help businesses manage cash flow and achieve growth. Contact us today to learn how we can support your financial needs.
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