Moloney Electric Inc.

Introduction

Moloney Electric Inc. is a manufacturer of electrical transformers and generators. Established in 1909 and headquartered in Ontario, Canada, Moloney sells their products to distributors and utility companies throughout Canada, the U.S. and the Caribbean.

Challenge

Moloney had been experiencing a growing demand for their product in the Caribbean, specifically around hurricane season, when demand from local utility companies would peak. Due to the extended terms they needed to offer foreign clients, combined with the nature of their sales cycle, Moloney’s cash flow was being heavily suppressed. Moreover, Moloney had recently completed an acquisition, which further strained working capital. While the company was on a growth trajectory, it needed a quick and flexible financing solution to meet their imminent growth.

As Moloney executives started meeting with prospective lenders, they quickly realized that banks were shying away from the deal because they would be unable to provide a lending facility beyond that which Moloney’s bank was already offering. When they turned to alternative lenders, they discovered that they would not be able to provide them with the availability they required within the necessary timeframe to complete the transaction.

Solution

FGI took the time to really understand the intricacies of the business and tailor a facility that would allow the company to meet its goals for the long-term as well as the short-term. It proposed a revolving credit facility against accounts receivables and inventory, as well as a term loan against their inventory, which was distributed across Canada.

Results

In only five weeks, FGI provided a financing solution, free of covenants and with minimal restrictions. This enabled Moloney to increase international sales volume and meet their timing deadlines. As a result of FGI’s efforts, Moloney was positioned to safely maintain its growth path and pursue more ambitious goals knowing it would be financially supported in doing so.