Case Studies

RCA Teams with Bank to Fund Medical Staffing Business

One of RCA’s customers, a successful provider of medical staffing services, had a mezzanine lender as part of their capital structure.

While the mezzanine lender had played a very important role in helping the business grow in its early days, the lender was expensive.

In addition to the negative impact on cash flow, the company was having challenges winning bids for new work in the low-price, technically-acceptable environment of federal procurement.

RCA worked with a community bank to provide capital sufficient to pay off the mezzanine lender while leaving the RCA facility in place to provide working capital.

The community bank was attracted to RCA’s nonrecourse structure, thus allowing the bank to have a senior position on all company assets.

The staffing company was able to dramatically lower their cost of capital and thus sharpen their pencil when bidding on new work.

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Joint Venture Turns to RCA for Financing

Two successful government contractors formed a joint venture (JV) to bid on a $300 million contract.

One JV member was a small business with annual revenues of $50 million; the other was a large public company with nearly $10 billion in annual revenue.

They won the bid.

Both companies had access to traditional credit facilities.  However, to use their credit lines to finance the JV they would have to guarantee the JV’s debt.

Neither wanted to do this.

RCA provided a non-recourse facility for the JV.  Neither JV member was required to guarantee the financing, nor tie up their credit lines.

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RCA Welcomes Back Customer

A new government contractor was experiencing rapid growth but did not have the history to qualify for a bank loan.

RCA helped them finance their growth and worked with them to arrange a traditional bank line.

After 18 months, the company secured a credit facility with a commercial bank.

Because of an acquisition that was slow to develop, their bank asked them to explore alternative financing.

The company was approached by several finance companies, but chose to return to RCA.

After a relatively short period, the company’s financial condition improved and RCA again assisted with their migration to a traditional credit facility.

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Value Added Reseller (VAR) Asks RCA for Help

A small contractor won a $5 million task order to deliver software to the U.S. Government.

The VAR providing the software was nervous about the financial stability of the small contactor given their historical losses and negative net worth.

The VAR did not want to take the credit risk of the small contractor but also did not want to lose the sale.  The VAR asked RCA to finance the small contractor.

The software needed to be delivered in two weeks and the financing needed to be in place by then as well.

RCA met the time constraints and put in place a $5 million facility for the small contractor so that the order could be delivered.

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Multi-Billion Contractor Selects RCA for Financing

A large, multi-billion government contractor approached RCA about providing receivable financing.

While the contractor had sophisticated bank facilities with some of the world’s largest and well-respected banks, the RCA program offered some unique cost, as well as structural, advantages.

RCA worked with the contractor to establish a $50 million financing facility, thus meeting the desires and requirements of the contractor and their private equity sponsor.

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RCA Provides Financing for Teaming Partners of Fortune Global 500 Company

Due to the fiscal uncertainties of federal contracting, one of the world’s largest companies became increasingly concerned about situations where they were a subcontractor to a small business under a federal contract.

In the past, an escrow account had been used to address this concern; however, an escrow account has limitations in reducing credit risk.

RCA offered the perfect solution.  By purchasing the small teaming partner’s receivables in a true sale fashion, RCA was able to:

  • Provide enhanced credit protection for the large company
  • Reduce large company’s Days Sales Outstanding (DSO) by 98%
  • Provide best-in-class government contract financing to a small business
  • Help U.S. Government meet its small business goals