Client Overview
Advanced Composites specializes in high-performance composite materials and components for the automotive, aerospace, and renewable energy sectors. Founded 12 years ago, the company has experienced rapid growth due to increasing demand for lightweight, durable materials.
Despite strong market demand and technical innovation, the company faced significant financial challenges that limited their ability to expand production capacity and capitalize on new market opportunities.
The Challenges
Financing Rejection
Despite strong growth, the company had been turned down by three banks for equipment financing due to inconsistent financial performance and limited collateral.
Capacity Constraints
Production capacity was maxed out, forcing the company to turn away new business and limiting their ability to meet growing demand from existing customers.
Untapped R&D Credits
The company was investing heavily in process improvements and material innovations but wasn't capturing available R&D tax credits for these activities.
Our Solution
Growth Financing Strategy
After being rejected by traditional banks, we developed a comprehensive financing strategy to secure the capital needed for expansion:
- Conducted comprehensive financial analysis to identify strengths and weaknesses
- Developed detailed equipment ROI analysis with production capacity projections
- Identified and secured specialized manufacturing equipment financing
- Negotiated favorable terms with minimal down payment requirements
Financing Details
Increased production capacity by 65% while reducing labor costs by 22% per unit
The Results
Equipment Financing
Secured equipment financing after being rejected by three traditional banks, enabling critical capacity expansion.
R&D Tax Credits
Identified and captured $300K in R&D tax credits, including $165K from amended prior year returns.
Production Increase
Expanded production capacity by 65% while reducing labor costs by 22% per unit through new equipment.
Long-Term Impact
Financial Transformation
- Improved gross profit margins from 32% to 41% through better job costing
- Reduced cash conversion cycle from 72 days to 54 days
- Established ongoing R&D tax credit documentation process for future years
- Created financial dashboard with KPIs for management decision-making
Business Growth
- Secured two major new contracts in the renewable energy sector
- Added 18 new jobs across production and engineering
- Increased annual revenue by 37% in the first year after implementation
- Positioned for sustainable growth with improved financial foundation
When traditional banks turned us down, Schapira CPA found alternative financing solutions that were actually better suited to our manufacturing business model. Their expertise in R&D tax credits was a game-changer - we had no idea we were leaving so much money on the table. The financial restructuring they implemented has given us the foundation we needed to scale our business with confidence.
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