[abfunders]

Richard, always nice interacting.

I spoke with the current lender (I'm sure you know Scott Peeper) and he was explaining to me that his AR moving forward doesn't need to be factored. The only issue now is that the SBA changed from I/O to P+I and is eating into his working capital.

I was under the impression that the factoring would help on the new jobs, not using the factoring to buy out the SBA, as it would be higher cost of capital, just easier to manage. After speaking with Scott, I found out yesterday that I was incorrect.

An advance might help him in some way, but there's no need to go that route since we have Scott's firm in position to help fund him and the invoices get paid.

If he wants to refi the SBA, then he can to settle his mind and get 4% money, but at this point, there doesn't appear a need to so.

[RichardGerard]

Hey Micah. I am not familiar with Scott. What I will say is that banks change revolvers to P/I based on Financials and/or their Portfolio concentration with a vertical. Either way- if the bank owns the asset(s) parsing out the AR in Construction- as you mentioned yesterday- will likely not be something they will be comfortable with unless factor subordinates to them with an inter-creditor to stand second in line in the event of a default.

Not sure where the client will get 4% money if he refi's the SBA- unless it's on Real Estate- given that Prime is above that..