$27 Million Asset-Backed Line of Credit
$27 MILLION ASSET-BACKED LINE OF CREDIT FOR A MASSACHUSETTS MANUFACTURER
A lower middle market manufacturer was looking to refinance and increase their existing ABL line to support expected growth.
A northeast manufacturing company in the early stages of a turnaround wanted to refinance and increase their existing asset-backed line of credit to provide additional liquidity for growth.
With an interim CFO and a part time accounting consultant, the company didn’t have sufficient finance department resources to reach out to multiple lenders and package their turnaround story to make them attractive to a new lender.
This situation was right in the Speritas Capital’s ‘advisory’ wheelhouse.
The company had breached its financial covenants because of a prolonged spike in raw material costs. At the same time, turnover in the Finance Department resulted in some less-than-perfect periodic closings of their books. This created a complication in telling the turnaround story.
We identified one of our lenders – a nationwide alternative lender – that was more than willing to work with this established company with good fundamentals, even in the early stage of the turnaround.
Speritas Capital’s Role
Speritas Capital was brought in after another lender (referred by their current bank) was unable to provide the needed liquidity.
Working closely with our selected lender, Speritas Capital explained exactly why margins had begun to improve and how that improvement would be sustained. We clearly articulated the extensive changes the company had made to its operating expense base and demonstrated that raw material prices were stable.
Speritas Capital used the company’s projections to create an EBIDTA bridge to show how the change in each major operating expense contributed to higher margins.
Speritas Capital added value throughout the process by translating the lender’s requests to the borrower and reviewing and editing the borrower’s responses to the lender to ensure that the borrower was accurate and responsive.
The Client’s CEO Says…
“We brought Speritas Capital into a stressful situation. Jeff was able to get up to speed quickly, identify the right lending partner and help us package our information to put our story in the best light. We are in the early stages of a turnaround so explaining our restructuring was critical to a successful refinancing. Jeff’s understanding of the ABL market was extremely helpful. We’re very happy with the service provided and with the outcome.”
About this Asset Backed Loan
There were four parts to this transaction:
- Refinancing of the accounts receivable and inventory line of credit
- Refinancing of the machinery and equipment term loans
- A new special advance to provide additional liquidity
- Cash out refinancing of a commercial warehouse
ASSET-BACKED LINE OF CREDIT
LENDER: ALTERNATIVE ABL
CLOSED IN: 60 DAYS
Conclusion – Post Finance Update
With the closing of this $27MM ABL line the company is well positioned for planned growth with a lending partner who appreciates their business fundamentals, understands their industry and the economic drivers of their business.
Speritas Capital was proud to be a critical part of the team that kept a northeast based manufacturer – and significant local employer – at full operation.
The Speritas Capital team is always happy to hear your story, learn more about your financing needs and answer your questions. And we never take an up front fee. Contact Speritas Capital Partners today!
Jeff Bardos, CEO – MEET JEFF!
The Speritas team brings our 30+ years of banking experience and our transparent, strategic approach to every client and every deal, both large and small.
Speritas Capital Partners Advises on $27 Million Closed Deal
GREENWICH, CT — SEPTEMBER 4, 2019
Speritas Capital Partners today announced the closing of a $27 million asset-based revolving line of credit for a major plastics manufacturer.
Speritas Capital was brought in by the client to assess financing options to pay off their current lender and to support substantial growth. The new revolving facility helps position this family-owned business for future expansion.
An experienced debt advisor, Speritas Capital Partners made this ABL deal happen by working closely with the company to craft a compelling story and financial package.
This facility refinanced a smaller revolver provided by a local bank group, allowing the company to meet growing customer demand. The quality of the customer base, permanent expense reductions and new product development were critical factors in attracting a new lender. The company is a major local employer, with 100 employees in a critical manufacturing sector.
“Our ability to provide financing options beyond the company’s local and regional lenders made a big difference,” says Speritas Capital’s CEO, Jeffrey Bardos. “We worked closely with senior management to understand the company’s situation, its products and its operating issues. This kind of partnership allowed us to advise the company on the most competitive financing options.”
“We worked with the client and the lender throughout the process to develop a comprehensive financing package that included accounts receivables, inventory, machinery and equipment and even a stretch piece.” Jeff added, “I was personally gratified to assist a family-owned business with 100 employees and deep connections to the local community.”
“We brought Speritas Capital into a stressful situation,” noted the CEO of the client. “Jeff was able to get up to speed quickly, identify the right lending partner and help us package our information to put our story in the best light. We’re in the early stages of a turnaround so explaining our restructuring was critical to a successful refinancing. Jeff’s understanding of the ABL market was extremely helpful. We’re very happy with the service provided and with the outcome.”