Medical Staffing Spin-Off Secures $100K A/R Facility for Financial Stability and Growth

The Situation
A newly created staffing company spun off an established medical staffing business that needed financial support to stabilize its operations. The original entity, owned by a seasoned entrepreneur, had been successful during the COVID-19 pandemic but experienced a slowdown post-COVID. One principal debtor accounts for about 80% of its accounts receivable and pays weekly. The original company faced a $30,000 tax liability due to an unissued tax credit, leading to a monthly installment plan. With potential default on this installment plan looming, the owner decided to transition operations to the new staffing company under new management to ensure financial stability.
The Solution
SouthStar Capital provided the new staffing company with a $100,000 Accounts Receivable (A/R) facility. This financial support was designed to help the new entity manage cash flow effectively, meet operational costs, and navigate the transition smoothly. The facility allows the company to continue billing while smoothly transferring employees and contracts.
The Result
With the $100,000 A/R facility from SouthStar Capital, the new staffing company is well-positioned to maintain its operations and financial health. Despite the recent challenges, the funding ensures that the company can meet payroll obligations and other expenses without disruption. This support enables the new staffing company to stabilize its finances, continue providing medical staffing services, and focus on future growth opportunities.