A California company had built a healthy, $5M-revenue business providing psychiatric staff to the State Prison System. Its bank, however, had concerns about customer concentration — even though its client was the State — and denied the company an adequate line of credit. The situation became dire when the first of a five-year series of state budget crises intermittently stretched a 30-day payment cycle to 120 days. Faced with the prospect of losing the state business, the company appealed to Marble Bridge, which quickly saved the contract by:
- Funding payroll so the company could manage the 120-day payment cycle.
- Enacting a trigger mechanism over the next five years to provide a similar funding solution every time a budget crisis caused another 120-payment cycle.
- Providing strategic counsel throughout the turmoil, enabling the company to achieve an 8X increase in annual revenue despite the state’s five-year rolling budget crisis.
Thanks to the financial and strategic assistance from Marble Bridge, the staffing company emerged from the five-year state-budget ordeal having ramped its annualized revenue to $40M from $5M.