Examples of Financing Transactions

A 10-year-old machining company in Chapter 11, losing money and located in Canada, seeks a $2,000,000 sale-leaseback on their existing equipment from a bridge lender. This company has tax liens and is considered non-financeable by other equipment lenders. Our lender offers a 65% loan to value against a ‘put’ written against the liquidation value of the equipment, even though the borrower is unable to demonstrate the ability to cover debt service on a historical basis. A commitment from our funding source was provided to the Bankruptcy Court within 10 business days.

A client seeks a $350,000,000 loan for an international construction project in South America. We can arrange for 100% financing of such transactions starting at $1 million and up, where the borrower can obtain the funding and only needs to pay for the cost of the capital raise itself, which can be for as little as 1/10th of 1% of the amount raised. Pricing is typically around 4% to 8 per annum, interest-only for construction projects.

A client seeks $10,000,000 in film financing. We represent an investor group who can provide such financing provided that the film does not contain excessive sex or violence and IF the borrower can post a cash-backed letter of credit for 20% of the total loan amount at closing and is willing to give up 40% equity in the film project. If the film loses money, the producers’ total exposure to loss is limited to their 20% guarantee, but if it makes money, they earn 60% of the profits.

A 3-year-old Florida-based meat wholesaler has a $1,000,000 line of credit with a local bank priced at prime plus 1%. We arrange a $2,000,000 line of credit through a more aggressive asset-based lender priced at prime plus 2%. The principal is happy to pay the added cost to obtain an additional $1,000,000 in availability.

A hospital in Chapter 11 seeks exit financing to come out of the 11 and offers as collateral their accounts receivable due from third-party insurance carriers and their real estate. A specialty healthcare lender that we represent can provide this $7,000,000 facility priced at prime plus 2% with a nominal collateral monitoring charge on the AR portion of the facility.

A company seeks to acquire raw land in Utah appraised for $1,000,000. A real estate lender provides a 60% loan to value against the purchase price allowing the transaction to be concluded, provided the borrower can contribute at least 10% cash against the purchase price with the seller holding a subordinated note behind our lenders first.

A developmental stage company seeks to borrow against their proprietary technology in order to continue the growth of their company. We can arrange such financing subject to the borrower obtaining a ‘put’ from a financially responsible entity guaranteeing the purchase of the collateral in the event of default on loan.

A company seeks $10,000,000 to refinance and further develop their business but only has $1,500,000 in unencumbered assets and insufficient historical cash flows to qualify for an additional cash flow loan. We can provide a source that will arrange for the guarantee of 85% of the loan amount in exchange for 35% equity in the company, provided that the principals can guarantee the other 15% of the loan amount with business collateral and provided that they can demonstrate the ability to cover the debt service. These loans are typically structured as 5-year interest-only credit facilities priced at approximately 7% per annum. Minimum transaction is $2,000,000.

A borrower is a 2-year-old company with no assets to speak of and seeks to borrow $100,000 for general working capital purposes. The financing can be structured on a totally unsecured basis, provided that the principal (or co-guarantors) personal credit is good to excellent with a FICO score of at least 680.

A 4-year-old auto parts manufacturer is having trouble servicing the debt on a term loan structured against their real estate and equipment, which is being amortized over a relatively short period of time due to their credit profile and type of equipment. We can arrange for a 1 to 3-year bridge loan where interest-only payments are made, greatly reducing the monthly cost of the loan. This new financing will allow for the company to regroup and grow sufficiently before taking the bridge out with permanent financing.

A foreign company seeks to refinance their real estate that is represented to be worth US $200,000,000. Our lender can provide for a 50% loan to value against the current value of the property and close the transaction within 30 days.

A non-operational company has real estate and equipment assets with a liquidation value of $3,000,000 and seeks to borrow against those assets in order to jump-start the company. A lender that we represent can provide a 1 to 3-year interest-only bridge loan structured with a 50% LTV against the equipment and a 60% LTV against the real estate. A portion of the loan proceeds can be placed in an interest reserve account in order to cover monthly debt service for some period of time.

A new company has orders for $10,000,000 to manufacture a product but has insufficient capital to complete the orders. A lender that we represent will provide funds specifically earmarked to pay for labor and material costs associated with the individual purchase orders.

Our borrower seeks financing to fulfill a contract that has been awarded to the company. Our lender will provide contract financing wherein funds will be provided on an ongoing basis to complete this contract, provided the contract involves the manufacture or wholesaling of a product.

Our borrower seeks $50,000,000 to convert a vacant commercial warehouse that they own into a class-A apartment building with over 350 units that, when completed, will have a value of $100,000,000. A bridge lender that we represent will provide construction financing with a 75% LTC against the TOTAL costs for the project, priced at 250 basis points over the 30-day LIBOR rate, which allows for an annual interest rate of under 3% with 2 points to close and structured as a 3-year interest only credit facility.

Our client is an employment agency with a $6,000,000 accounts receivable line of credit-seeking additional capital. They do not, however, have additional collateral to support the loan. Our lender can replace the AR line and add a term loan of $2,000,000 based on the monthly recurring revenue being generated through the borrower’s long-term government contracts.

Our borrower has a traditional asset-based loan of $3,500,000 (already receiving the maximum LTV on the various collateral) and seeks an additional $1,000,000 but has no additional collateral. Our lender can provide a junior loan behind the senior secured lender advancing up to 100% of the liquidation value of the various collateral.

A 3-year-old service business with limited collateral has accountant-prepared financial statements demonstrating historical net income or EBITDA, which could support a cash flow or mezzanine loan. This loan could be structured to provide for an amount equal to 3 to 4 times EBITDA.

A piano rental company recently discharged from Chapter 11 needs $100,000 to make a balloon payment within 2 weeks and has no available collateral to secure a bridge loan. We are able to provide the $100,000 in 7 business days against the company’s credit card receipts.

A dental x-ray technician operates a company that has shown losses for the last several years. They seek to acquire a $200,000 piece of equipment that will increase their revenue and cause them to become profitable. Unfortunately, with the historical losses, they cannot obtain traditional equipment financing. We arrange the loan using a second position on the principals’ personal residence and in part based on the principals’ personal good credit.

A borrower seeks 100% financing to acquire a $250,000 mixed-use building. We can arrange for 80 to 90% LTV against the purchase price subject to the borrower having excellent personal credit, and the balance can come from an unsecured FICO loan based on the same excellent personal credit of the borrower. It can be arranged as either full documentation or a stated income loan.

A large church organization in bankruptcy seeks $100,000,000 to settle a judgment and exit their Chapter 11 case and has $500,000,000 in unencumbered real estate, including churches, schools, and office buildings to offer as collateral. We can arrange for the $100,000,000 loan secured through a hard money interest-only lender.

An adult entertainment club seeks $2,000,000 to refinance out of the seller’s note that the former owner is holding and requires a 70% LTV to do so. We can arrange such loans despite the industry “problem” that conventional lenders and banks would encounter.