Recently Funded - $27MM Revolving Asset-Backed Line of Credit in Massachusetts

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. 

Loan challenges

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.

Speritas Capital Partners helped a 45 year old manufacturing company from Massachusetts secure a $27MM asset-backed line of credit.Asset Backed loan for manufacturing company - revolver

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

LOAN AMOUNT:
$27MM

LOAN TYPE:
ASSET-BACKED LINE OF CREDIT

LOAN TERM:
3 YEARS

RATE:
CUSTOM LIBOR+

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.


Are you looking for a strategic partner to advise on your next financing challenge?

Learn more about our CEO Jeff Bardos.


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
Cathy Blood, Partner and Director of Marketing

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.