Description

Company Summary:
- The Company, headquartered in Florida, started in January 2011.
- It provides factoring services to the trucking industry.
- It purchases invoices from the clients for a fee and provides its clients funding within 24-48 hours.
- The services include managing the billing, receivables and collections of the clients’ invoices and equipment leasing
- Approximately 75% of small trucking companies utilize factoring services.

- Company will be the premier factoring company in the U.S. for small to mid-size trucking companies, grossing $250MM by 2018.
- This type of growth will enable the Company to create exceptional value for its shareholders.
- Company has experienced high double-digit growth over the last 5 years with an approximate 1% default rate in an industry with a norm of 10% growth and 2% - 3% default rate.

2015 Revenue was $9mn with $2.7mn EBITDA.
2014 Revenue was $4mn with $1.2mn EBITDA.
2013 Revenue was $2.5mn with $0.5mn EBITDA.

Industry Overview:
- Factoring is, essentially, payday loans for businesses in a contractual, ongoing agreement
- Trucking is an industry that relies on factoring
- Typically a factoring company buys a receivable, which comes in the form of purchasing the actual signed bill-of-lading (“BOL”), which when signed becomes the proof-of-delivery (“POD”)
- The great majority of factoring companies’ purchase these PODs at a discount rate of 5-10%, and then hold an additional recourse fee of 5-10% until the bill is paid
- Depending on the time period in which the bills are paid, typically 15, 30, 45, and 60 days, the discount rate increases, and at 60-75 days the bill is recoursed back to the trucking company, and the resulting balance, less the fee, is deducted from the next settlement.

- Demand for freight transportation in America is increasing in line with our growing population and increased economic activity
- During the course of one year, over 19 billion tons of freight, valued at over $13 trillion, was carried over 4.4 trillion ton miles in the U.S. The U.S. transportation system currently moves over 50 million tons of freight worth $36 billion dollars each day on the Nation’s transportation network.
- By 2035, tons transported overall are expected to double to over 100 million
- Trucks are expected to gain ground vis-à-vis most other modes on a volume basis going forward, with share of total tonnage growing from 67.2% in 2010 to 69.2% in 2016 to 70% by 2022.

Transaction:
The Company is looking for $2mn in capital.
1,000,000 pays 8% annually (paid monthly) with a 5% equity kicker which dividends are paid monthly. The other 1,000,000 entitles the investor to 5% equity in the Company.

Posted Oct 7, 2016

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