Business Capital Secures $6.5 MM Credit Facility for Contractor
Business Capital announced it structured and secured a $6.5 million multi-tranche credit facility for a mechanical contractor providing a wide range of services for commercial clients.
The company experienced a cash-flow shortage after the economic downturn, which adversely affected the construction market, worsened by taking on a large, unprofitable project during that time. The company worked through their bank covenants, was placed in the special assets department of the bank and instructed to find a new lender quickly or start liquidating assets to pay off the loans. Even if their incumbent lender was agreeable to them staying, the terms of the company’s existing line of credit did not provide the company with the flexibility or full banking relationship needed to recover quickly. Because of the company’s thin margins it was necessary for Business Capital to deliver conventional financing at an all-in interest rate of about 5%.
Business Capital was able to structure a customized, affordable working capital credit facility to provide the company the liquidity needed to take advantage of new business opportunities and future growth.
The company, established in 1949, is a family-owned mechanical contractor delivering full design, construction, fabrication and maintenance services for complex plumbing, piping and HVAC systems.
Chuck Doyle, managing director, Business Capital, said, “Our client was fatigued with the delays and lack of traction they were seeing in the credit market. The BizCap team is totally customer focused with the marketplace knowledge and resourcefulness vital to position our client for success. Working with urgency and purpose, we delivered the most competitively priced, intelligently structured financial solution at a critical juncture.”