Drawing the Battle Lines: ABL Lenders and BDCs Engage in Tug-of-War Over Unitranche Loans

The simplicity and speed required to put together a unitranche facility has made it a popular option for borrowers and lenders. However, the façade of the split-lien solution is beginning to crack as first and second lien lenders find themselves in a tug of war over intangibles. Charlie Perer explores the ways lien fighting is imploding a once beautiful friendship.

March 2018

March 2018
Specialty Lending
Vol. 16, No. 2

Accurate Appraisals Ground Airballs But Will They Hold Up if a Recession Hits?

The soaring stock market has resulted in a frothy ABL market with competition at an all-time high and liquidations, outside of retail, at a low. Appraisals from the Big Four firms have held up. Charlie Perer looks into his crystal ball to envision the ABL scenario when the next recession hits.

Instant Funding, Seamless Customer Transactions Fintech Lenders Transform Small Business Lending

In the past decade, growth in financial technology has spawned a new generation of online lenders. These lenders use the latest technology to underwrite and finance small business loans. Customers can apply online and receive funding in 24 hours in some cases. ABF Journal Editor Nadine Bonner speaks with executives from three fintech companies that specialize in small business loans.

The Forgotten Sector of Senior Care Operators: Lending Options for Smaller, Non-Institutional Owners

As the aging population continues to grow, there is significant demand for smaller, more “home-like” senior communities that are also more familiar and affordable. The developers, owners and operators of these smaller communities typically face unique challenges obtaining financing, especially from traditional lenders. Adam Sherman explains how specialized lenders create offerings for this niche segment.

Lenders Beware: Potential Red Flags When Financing Franchises

Franchising is becoming a popular option for a wide range of businesses. Franchising provides brand recognition for health clubs, bakeries and, of course, restaurants and fast food outlets. As the business model expands, franchisors often require third-party financing. Leonard Vines and Beata Krakus point out the red flags lenders should watch for before agreeing to finance a franchise.

The Changing Landscape of Non-Sponsor Finance

With too much capital chasing too few transactions, the middle market is ripe for change. Charlie Perer predicts an explosion of debt options for non-sponsor backed companies over the next 10 years. He notes that as non-banker lenders offer customers more service and flexibility, banks will respond by consolidating.

Building Community One Bottle at a Time: Live Oak Bank Guides a Craft Brewer from Home to Market

Liz and Curtis Chism began by making beer in their kitchen with a brewing kit. Today, they own Council Brewing, a popular San Diego destination for craft beer lovers. As the Chisms honed their brewing skills, they also gained the financial expertise to turn their hobby into a thriving business. Live Oak Bank provided both financing and business acumen to help them make the transition.

Innovative Financing: From Mellon & Sons to Alternative Lenders’ Impact on ABL Today

In the face of continuing bank regulation, alternative lending companies are launching to fill in the gaps. ABF Journal contributor Hugh Larratt-Smith examines the types of loans these lenders are providing and shows how ABL lenders can benefit by teaming up with these new players.

Following the Two-Second Rule: Building a Brand in the Finance Business

Brands like Cheerios, Toyota and Coca Cola have become ubiquitous. Once confined to radio, television and print publication ads, they now follow us as we surf the internet, peer out from the margins of our Facebook pages and insinuate themselves into our Twitter feeds. Charlie Perer argues that small lenders need to establish their own brands to compete with the industry giants. A strong brand can set a lender apart from the pack and establish an identity that will resonate with borrowers.