A Unicorn growing faster than its financial resources could support.

DEF Inc. is a privately held company in Toronto operating out of single location business. It’s niche is Architectural Sheet Metal Work with specialty in high-end ornamental railings, stairs and lofts for the rich and governmental properties. Within 4 years of being founded the corporation grew from 5 employees and $0.75 million in sales to 50 employees and $10 million revenues due mainly to high demand from its primary market in USA.

This rapid growth naturally strained financial resources due to high cash burn rate. Despite healthy demand for its highly profitable niche (one year order back-log). Corporation was technically insolvent despite a $1 million facility with a major chartered bank that refused to invest more. Moreover, loan covenants with the bank made it difficult to approach other lenders. The situation needed a creative financing solution, and we were brought in to help. Since additional loans or factoring were off the table, we were able to raise $1.2 million Through SR&ED grants from the government and $1 million in project PO financing from a trade finance organization. This enabled the corporation to execute and fulfil back log orders of about $5 million and become cash flow positive again.