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Bank of the West, Corgenix Sign New $1.5MM Credit Facility

September 05, 2013, 07:56 AM
Filed Under: Healthcare

Corgenix Medical Corporation announced that it has closed on a $1.5 million secured revolving line of credit with Bank of the West. The new revolving line of credit provides Corgenix a very favorable interest rate and much greater flexibility than the previous asset-based revolving line of credit. The new credit facility follows the recent move by Corgenix of its primary banking arrangements to Bank of the West.

The new credit facility will provide gross availability of $1.5 million, and will replace an expiring asset-based revolving line of credit of the same amount with LSQ Funding. The new line of credit will be used for general working capital purposes, will be secured by Corgenix accounts receivable and inventory, and will be subject to normal covenants. It carries an interest rate of one month LIBOR (currently 0.18%) plus 4.0%, which would result in a current interest rate of 4.18%, considerably lower than the current LSQ interest rate of 15.7%. Corgenix did not have any amounts outstanding under its expiring revolving line of credit as of June 30, 2013. The agreement with Bank of the West initially has a term of one year. Under the agreement, Corgenix has the ability to borrow up to $1.5 million in cash, on a revolving basis, secured by accounts receivable, inventory and other assets.

Commenting on the announcement, William Critchfield, senior vice president of operations and finance and chief financial officer of Corgenix, stated, "The favorable terms of the new revolving credit facility emphasize our company's much improved financial position, its strong industry track record and anticipated growth."

"Our new credit facility, combined with the company's prospects for a record year in fiscal 2014, will provide us the flexibility required to fund our growth and execute on strategic initiatives," Critchfield continued.

Corgenix is a leader in the development and manufacturing of specialized diagnostic kits for immunology disorders, vascular diseases and bone and joint disorders, including the world's only non-blood-based test for aspirin effect.

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