[NickHubbard]

My client needs this loan to consolidate ALL existing debt and provide working capital for the business. Company has been in business for 12 years and their 2015 sales totaled $1.3M. They are seeking a combination asset/cash flow based loan program.


Their outstanding loans currently total $580,711 with monthly service payments exceeding $68k. With the appropriate consolidation and working capital loan, their EBITDA will improve from ~$275k to ~384k with a corresponding DSCR moving from ~2 to ~2.6. With a $1M loan package they estimate their payments to be approximately $11k per month, and thus improving the monthly cash flow by ~$57k. They do realize actual gains / improvements will depend on what rates and periods of payments someone can offer.


They also have the opportunity to extend their business by acquiring our main supplier of lumber. Details will be provided once they “cement” a financing relationship. Their goal in that situation would be to accomplish the loan consolidation as previously described, provide working capital for both businesses, and have acquisition funds to obtain our lumber supplier. With a loan of $1.5M they would be able to accomplish all three strategic goals. Acquisition of the lumber business, combined with the debt consolidation, will provide and estimated EBITDA of ~$581k and allow for post-loan DSCR of 2.91. Additionally, their monthly loan service payments would improve by over $50k. Acquisition of this business adds significant cash flow to their existing business.

They are looking for a 10 year loan at no more than 10% per annum to be paid on a monthly basis.

[brokerCompany]

Try a bank or real asset based private lender that will go off AR,inventory and real estate.

My client needs this loan to consolidate ALL existing debt and provide working capital for the business. Company has been in business for 12 years and their 2015 sales totaled $1.3M. They are seeking a combination asset/cash flow based loan program.


Their outstanding loans currently total $580,711 with monthly service payments exceeding $68k. With the appropriate consolidation and working capital loan, their EBITDA will improve from ~$275k to ~384k with a corresponding DSCR moving from ~2 to ~2.6. With a $1M loan package they estimate their payments to be approximately $11k per month, and thus improving the monthly cash flow by ~$57k. They do realize actual gains / improvements will depend on what rates and periods of payments someone can offer.


They also have the opportunity to extend their business by acquiring our main supplier of lumber. Details will be provided once they “cement” a financing relationship. Their goal in that situation would be to accomplish the loan consolidation as previously described, provide working capital for both businesses, and have acquisition funds to obtain our lumber supplier. With a loan of $1.5M they would be able to accomplish all three strategic goals. Acquisition of the lumber business, combined with the debt consolidation, will provide and estimated EBITDA of ~$581k and allow for post-loan DSCR of 2.91. Additionally, their monthly loan service payments would improve by over $50k. Acquisition of this business adds significant cash flow to our existing business.

They are looking for a 10 year loan at no more than 10% per annum to be paid on a monthly basis.

[bdshaw]

Hi Nick, we should talk about this. I don't think anyone other than the SBA would write a term or installment for them for ten years.
The ABL portion will be a revolver that rises and decrease as do the assets. I'm wondering what the assets are. The A/R is probably around 175K which leaves equipment and finished inventory. I assume that they have manufacturing equipment if they buy lumber.
There is money available to acquire companies but more expensive than what you're are looking for.
How about giving me a time to call and discuss the options a bit more privately.
One thank you. You have given those of us who are in this marketplace enough information to get an idea of what the deal is. Much more than most.
Bob

[NickHubbard]

Sure, hit my inbox with your number. They dont wanna do the SBA loan though, cause they need to get funded quickly.

Hi Nick, we should talk about this. I don't think anyone other than the SBA would write a term or installment for them for ten years.
The ABL portion will be a revolver that rises and decrease as do the assets. I'm wondering what the assets are. The A/R is probably around 175K which leaves equipment and finished inventory. I assume that they have manufacturing equipment if they buy lumber.
There is money available to acquire companies but more expensive than what you're are looking for.
How about giving me a time to call and discuss the options a bit more privately.
One thank you. You have given those of us who are in this marketplace enough information to get an idea of what the deal is. Much more than most.
Bob

[Chambo]

2015 ANNUAL sales were $1.3 million? That's approx $109,000 a month. they have $580,000 in outstanding debt currently?

Am I reading this correctly?

[Kevin Henry-Seacoast]

My client needs this loan to consolidate ALL existing debt and provide working capital for the business. Company has been in business for 12 years and their 2015 sales totaled $1.3M. They are seeking a combination asset/cash flow based loan program.


Their outstanding loans currently total $580,711 with monthly service payments exceeding $68k. With the appropriate consolidation and working capital loan, their EBITDA will improve from ~$275k to ~384k with a corresponding DSCR moving from ~2 to ~2.6. With a $1M loan package they estimate their payments to be approximately $11k per month, and thus improving the monthly cash flow by ~$57k. They do realize actual gains / improvements will depend on what rates and periods of payments someone can offer.


They also have the opportunity to extend their business by acquiring our main supplier of lumber. Details will be provided once they “cement” a financing relationship. Their goal in that situation would be to accomplish the loan consolidation as previously described, provide working capital for both businesses, and have acquisition funds to obtain our lumber supplier. With a loan of $1.5M they would be able to accomplish all three strategic goals. Acquisition of the lumber business, combined with the debt consolidation, will provide and estimated EBITDA of ~$581k and allow for post-loan DSCR of 2.91. Additionally, their monthly loan service payments would improve by over $50k. Acquisition of this business adds significant cash flow to their existing business.

They are looking for a 10 year loan at no more than 10% per annum to be paid on a monthly basis.

Hi Nick,

I would like to learn more about this. What is their current outstanding AR? How much inventory do they carry? What is the value of the equipment?

Best,

Kevin

[NickHubbard]

Yes, that is whats stated in the info they sent me.

2015 ANNUAL sales were $1.3 million? That's approx $109,000 a month. they have $580,000 in outstanding debt currently?

Am I reading this correctly?

[bdshaw]

734-929-3800
Bob Shaw
anytime after 8:30 tomorrow

[RichardGerard]

Nick,

Both Bob and Kevin can likely help but given the several moving parts the client will need to understand that Lenders will need to fully understand the risk prior to funding- accordingly that will take a little time.