First Capital’s ‘RAMP’ to Provide Liquidity Without Debt Financing
First Capital announced its Receivables Asset Monetization Program (RAMP) to provide companies with much-needed liquidity without adding debt to their balance sheet.
RAMP works as a “true sale” agreement in which First Capital purchases all or a portion of a client’s accounts receivables converting the assets to cash. The program can be structured on a non-notification basis and can be transparent to the client’s customers.
This off-balance sheet liquidity program works especially well for large, domestic, multi-national and global companies, as well as for investment companies, such as private equity groups, looking to enhance liquidity without incurring debt on their balance sheet. The benefits include reduced financial leverage and improved liquidity ratios.
In addition to liquidity maximization, RAMP can work with existing credit facilities, often without the need for an inter-creditor agreement. Additionally, the program provides credit enhancement features that mitigate risk of clients’ customers defaulting on invoice payments in the event of customer insolvency.
“RAMP is a winning solution for our clients,” remarked Kevin McGarry, EVP of First Capital. “The program provides our clients with certainty of payment while improving liquidity often without the need for clients to re-document their existing credit facilities.”
Pricing for RAMP is tailored to each client based upon receivable turnover, dilution and credit quality of the accounts.