Remote School Tutoring Service
Business Stage
Established Business
Industry
Service
Time In Business
6 Years
Employees
14 Full Time
Equipment Type
Weak Collateral
Ticket Size
$30K - $50K
Equipment Details
Laptops
Equipment Purpose
Expansion into more school districts
Weaknesses (Cons)
- Seasonal business revolves around the school year
- Weak collateral; computer laptops that are not recoverable in the event of default due to being remotely located at students homes
- Balance Sheet reflected negative entries for owner’s equity & common stock
- Company had a very high level of debt ($900k) and multiple UCC filings since it financed laptops through many different lenders
- Personal Chapter 7 BK in 2002
- Showed accrual losses every year
Strengths (Pros)
- Currently services 140 districts
- The company has $254K Mutual funds balance
- 724 personal credit score
- Low personal debt
- CPA completed business and personal returns last three years showing good management and delegation
- Current positive cash flow of $1.2MM annualized supported current debt service and TEAM lease expense
Creative Solution
A lease is approved and funded when we have both...
- Positive future cash flow
- Security in the collateral This lessee operated the business out of two office condos which were owned by the company. The lessee offered up 2nd liens on the real estate, which had low balances around $100k and about $200-$300k in equity at the time of funding. Depending on pay history and financial position of the lessee, the lessee can return to TEAM for their laptops next school year, and we may not have to ask for any more collateral to do another $50-$100k in new laptops.
Team Sales Rep
Mike Wright
