Medical Equipment Case Study: 21% Revenue Growth, 18% Profit Improvement
See how a forward-thinking CFO led a medical equipment company to 21% revenue growth and 18% profit improvement in under 6 months—powered by a strategic asset-based lending (ABL) expansion.
Mendel Schapira
Team leader of Finance
January 25, 2025
8 min read
See how a forward-thinking CFO led a medical equipment company to 21% revenue growth and 18% profit improvement in under 6 months—powered by a strategic asset-based lending (ABL) expansion.
At a Glance:
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The Challenge: Growth Stalled by Capital Constraints
A $40M medical equipment distributor was facing surging demand but could not scale due to working capital bottlenecks. The CFO needed a way to fund inventory and receivables growth without overleveraging the company.
- Traditional credit lines maxed out
- Missed sales due to inventory shortages
- Slow collections from hospital clients
- Pressure from private equity board to improve returns
Root Cause Analysis: Funding Gaps & ABL Opportunity
Financial
- • Insufficient working capital for growth
- • High DSO (days sales outstanding)
- • Inventory turns below industry average
Strategic
- • Underutilized asset base (A/R, inventory)
- • Lack of flexible financing options
- • No real-time cash flow forecasting
Strategic Intervention: ABL Expansion & Growth Plan
Key Actions
- • Structured a $10M asset-based lending facility
- • Used ABL to fund inventory and receivables growth
- • Implemented weekly cash flow and borrowing base reporting
- • Negotiated better terms with suppliers using new liquidity
Implementation & Results: 21% Revenue, 18% Profit
Financial Impact
- • Revenue up 21% in 6 months
- • EBITDA margin up 18%
- • Inventory turns improved by 1.7x
Strategic Impact
- • No missed sales due to stockouts
- • Improved supplier relationships
- • Board confidence in CFO leadership
Key Lessons & Takeaways
- ABL unlocks growth for asset-rich companies
- Weekly cash flow and borrowing base reviews are critical
- CFO leadership is key to successful expansion
- Flexible capital enables strategic supplier negotiations
Conclusion: CFO-Led Growth with ABL
Asset-based lending can be a game-changer for medical equipment and distribution companies. Download the full PDF for a detailed breakdown and actionable insights for CFOs.
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