Case Study: Invoice Factoring Helps Telecom Service Vendor Solve Cash Flow Crunch to Double in Size

By: Craig Cohen, Director of Sales

Craig is an experienced risk manager with the entrepreneurial spirit and leadership skills that support Encore client success.

Better Cash Flow Allows Specialized Services to Rapidly Grow

Specialized contracting companies often balance lucrative opportunities with unique cash flow challenges. Our client is a prime example. This contracting company provides highly skilled workers, specialized vehicles, and equipment to upgrade fiber optic cable lines across the United States.

When they first partnered with us, they had severe cash flow challenges from restrictive lending and high-cost Merchant Cash Advances (MCAs). They sought a funding partner who could provide access to capital at a reasonable cost to stabilize their operations and fuel growth. They gained this with invoice factoring, or payroll funding, and much more from our team.

The Challenge

This company faced distinct challenges as a player in augmented staffing in the telecom industry. Their business required significant capital to train recruits through their own training program and outfit technicians with specialized tools and vehicles. Their restrictive lender was unwilling to extend support during critical periods.

The situation worsened when the company’s main client withheld payments in Q4 2023. This resulted in their lender cutting off funding entirely. They resorted to expensive MCA loans to bridge the gap; six high-interest loans created overwhelming monthly debt service. These financial burdens threatened their ability to meet payroll and maintain operations, putting employees and customer relationships at risk.

The Solution

Our team stepped in and stepped up to the challenge. First, we provided emergency funding to cover payroll. Over the following weeks, we refinanced the company’s six MCA loans, cutting their monthly debt payments in half. Our client was thrilled because saving this much is almost unheard of in the industry! We also consolidated their financial obligations into a manageable structure.

Featured Service for This Client

• Funding-Only Payroll Factoring

With invoice factoring, we provided the client with enough working capital to support rapid growth. Despite the complexity of seven separate funding entities—six MCA loans plus their senior lender—our team efficiently navigated the process. Our client was impressed with a seamless transition and had a renewed outlook on their long-term success.

“Our team did a great job of handling the client’s obstacles quickly. We made sure the onboarding was smooth, then we funded their payroll and refinanced six MCA loans to cut their monthly debt payments in half, which is significant! It was all about helping them get that fresh start they deserved, especially with the funding deadline looming.” – Craig Cohen, Director of Sales, Encore Funding

The Results

Invoice factoring with Encore enabled this client to double in size and revenue in less than a year. The immediate savings from debt refinancing allowed them to reinvest in operations. They took on more work while providing their clients with the best service possible.

The company praised our team’s exceptional service, notably our support during onboarding and learning the telecom industry’s unique challenges. Beyond payroll funding solutions, Encore provided peace of mind, which allowed leaders to focus on cultivating in-house talent and providing superior service to their clients.

“What started as a dream, backed by a solid vision of quality and culture, quickly grew into a scope we did not imagine, nor could fully manage. We know telecom and team building better than most. We did not know finance. With Encore’s help and guidance, we now see a clear path toward success. We would not be benefiting from our most recent success without Encore’s involvement.” – CEO of Telecom Services Vendor

In a competitive industry, expert support and access to funding can be the difference between growth and stagnation. Apply here to tackle your business hurdles head-on and achieve your vision of success.