Junction Restoration
When payments disappear, obligations don’t
Junction Restoration had a $40M backlog and a $20M problem: a client walked away from a completed contract without paying, right as the business hit its busiest season. Rather than let one missed payment strain payroll and subcontractor relationships, Junction found a solution in flexible capital tailored to their situation and operational rhythm. A $2M Cash Flow Financing facility absorbed the impact, kept the backlog moving, and put the company on pace for $180M in annual revenue.
Receivables from a completed project never came and new work was fast approaching. Flexible capital absorbed the blow so neither liquidity nor subcontractor relationships felt the blow.
The Client
Junction Restoration has been repairing property damage from fire, water, and storm loss since 1999. What started as a small operation has grown into a $130M-a-year business built on a reputation contractors and property owners trust when the damage is done and the clock is running. With a $40M backlog on the books, Junction had more work in front of it than at almost any point in the company’s history.
The Situation
The trouble started with a job that was already finished.
Junction had completed a $20M contract in full, with crews paid out of pocket, materials already on the books, and the expected revenue built into its working capital for upcoming jobs. The invoice sat unresolved right as build season demanded more cash.
“We built this business on keeping our word to the people who work for us. One bad contract wasn’t going to change that.”
Through no fault of their own, the company found itself behind the eight ball. Meeting their obligations meant covering completed project costs and subcontractor obligations out of Junction’s own operating cash, with their eyes on the $40M in backlog that needed to keep moving forward regardless of whether the one bad invoice ever got resolved. Unfortunately, it’s not a rare occurrence in the industry. It’s one we at National see often, which has made us adept at finding a solution.
The Challenge
Junction needed capital that could absorb a specific, one-time hit without disrupting a business that was otherwise performing as planned. A traditional lender underwriting against the missed payment alone would have seen only the problem, flashing red in Junction’s ledger.
The business needed a structure that moved fast enough to deploy during peak season, protected subcontractor and vendor relationships in the meantime, and left room for the work still ahead without overcommitting beyond what the situation required.
Junction had an Investment Banker, Collin G. in their corner as an advisor. With the backlog of work available to underwrite against, he knew performance-backed financing could ______
He connected with a dedicated Finance Business Advisor at National, Alec Stepanian, who looked past the missed payment to the full picture: nearly three decades in business, a $40M backlog, and a pipeline of proven contracts that made the underlying business case strong.
Alec structured $2M in Cash Flow Financing around that pipeline, built to:
- Minimize the liquidity impact of the unpaid contract
- Protect subcontractor and vendor relationships
- Keep the existing backlog moving
- Preserve capacity for future work
Most growth capital is designed to fund what's next. This facility was built to protect what was already secured.
Junction’s backlog, its subcontractor relationships, and its growth targets couldn’t fall under risk due to a single client’s unpaid invoice. Structuring around the strength of the business, rather than the disruption sitting on top of it, let Junction keep its commitments to its crews and its schedule while the rest of the business kept performing.
Why National Business Capital
National looks at the full shape of a business rather that the line item causing pressure at the moment. For Junction, that meant recognizing a $40M backlog and steady demand, then structuring capital that matched it.
Today, Junction is on track to hit $180M for the year.
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