Case studies: how real positions get restructured
Financing concepts are abstract until you watch one applied to a company that looks like yours. The cases below follow the same arc: a real operating business, a capital structure working against it, and the structure that replaced it. Each is an illustrative composite drawn from common engagement patterns in our practice, with details altered and combined; none describes a specific client.
The staffing firm paying for its own growth
- Situation
- A staffing company with roughly $12M in annual revenue ran weekly W-2 payroll while its clients paid on net-45 terms. Two merchant cash advances, taken to cover payroll during a growth spurt, were debiting about $4,200 every business day.
- Challenge
- Combined debits consumed most of the margin on every placement. Each new contract increased payroll ahead of collections, so growth made the shortfall worse, and a third advance was on the table.
- Solution
- Both advances were refinanced into a single revolving line advancing against the firm's receivables, with payoffs and UCC releases coordinated across both funders at one closing. Payroll now draws from availability; client payments sweep the balance down.
- Outcome
- Daily debits ended. Monthly financing cost fell by more than two thirds, and availability now grows automatically with billing, so the firm added recruiters instead of declining orders.
The distributor and the order it could not afford to win
- Situation
- A wholesale distributor landed its largest purchase order ever from a national retailer: net-60 terms, with a six-figure inventory buy required up front.
- Challenge
- The bank declined additional credit against a balance sheet it read as too light, and an MCA would have consumed the margin on the deal before the first pallet shipped.
- Solution
- An asset-based facility was structured against both receivables and inventory, sized so the borrowing base covered the inventory buy and the receivable it would become.
- Outcome
- The order was funded, delivered, and collected. Because the borrowing base scales with assets, the next large order required no new negotiation, and the retailer relationship became a growth engine instead of a liquidity threat.
The subcontractor with eleven daily payments
- Situation
- A specialty subcontractor billed steadily across three commercial projects, but the general contractor held retainage and paid when the owner paid. A stack of advances, three funders, eleven separate daily and weekly debits, had kept crews paid.
- Challenge
- The stack consumed cash faster than progress billings replaced it, and layered UCC filings from the funders blocked every conventional refinancing attempt.
- Solution
- The full position was mapped, payoff letters negotiated with all three funders, and the stack consolidated into one facility against contract receivables, with every lien released at a single coordinated closing.
- Outcome
- One monthly obligation replaced eleven debits. The company bid its next project on the strength of restored cash flow rather than around its debt calendar.
The home health operator whose payers were slow but certain
- Situation
- A home health company billed insurers and facilities accurately and on time, and still ran short every month: reimbursement lagged roughly 60 days behind service while caregivers were paid weekly.
- Challenge
- Banks discounted healthcare receivables the operator considered its strongest asset, and staffing shortages made every missed payroll an existential risk.
- Solution
- A receivables facility was structured against payer A/R, sized to the reimbursement cycle, advancing against invoices most lenders would not read.
- Outcome
- Payroll certainty first; then capacity. The operator accepted two facility contracts it had been sitting on because it could finally carry the receivables they generated.
The manufacturer that was profitable on paper and broke at the bank
- Situation
- A contract manufacturer won a program with a blue-chip OEM: strong volume, brutal terms. Raw materials had to be purchased months before the first invoice would be paid, and an existing equipment loan plus one MCA already sat on the balance sheet.
- Challenge
- No single lender would cover the materials ramp, the MCA payoff, and working capital headroom in one instrument.
- Solution
- A two-piece structure: a revolver against receivables and inventory to fund the ramp and retire the MCA, and a sale-leaseback of owned equipment covering the remainder, with an interest-only period through the program's launch.
- Outcome
- The program ramped on schedule. Debt service fit within cash flow through the launch window, and the facility scaled with each new release instead of requiring renegotiation.
The questions these cases keep answering
Different industries, same physics. How do I refinance expensive business debt? By securing new credit against the assets the expensive debt ignored, usually receivables. Can receivables support a larger facility? Yes; borrowing bases scale with billing, which is why the facilities above grew with their companies. What if a bank will not finance my business? The bank's box is one box; see what to do after a bank decline. What is structured working capital? Several instruments designed as one system; see structured capital. When should a company consider private credit? When the bank's answer is no, slow, or too small, and the growth or the exit is worth a premium; see private credit for the lower middle market.
Common questions
Are these real Modavva client transactions?
They are illustrative composites: built from common patterns across engagements in our practice, with details changed, combined, and simplified. No case describes a specific client, and outcomes are not a promise of results; every financing depends on underwriting.
What do these companies have in common?
Three things: real B2B revenue, meaningful receivables or other financeable assets, and a capital structure working against the business rather than for it. That combination, creditworthy but cash-strangled, is the profile Modavva exists to serve.
How do I know which case is closest to my situation?
Start with what is consuming the cash. Daily debits point to the MCA exits; a big order or fast growth points to the distributor case; slow institutional payers point to the healthcare case; several problems at once point to the structured manufacturing case. A confidential review will place your file precisely.
What would Modavva need to evaluate my situation?
Recent financial statements, an accounts receivable aging report, and a schedule of existing debt including any advances and their payments. With those three documents an advisor can usually tell you within days whether and how the position can be restructured. The review is free and confidential.
See your situation in one of these?
Tell us where things stand. A Modavva advisor will review your situation confidentially, at no cost and with no obligation, and come back with whether and how it can be restructured. Typically a same-week first response.
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