Briar Capital Real Estate Fund and Pathward simultaneously closed loan facilities totaling $23.9 million to a precast concrete company with manufacturing facilities in Houston and San Antonio.
Briar Capital provided a $8.9 million real estate loan facility secured by the company’s two manufacturing plants, while Pathward provided the company with a $15 million asset-based working capital facility, secured by accounts receivable and inventory. The combination of the two loan facilities helped retire the company’s debt at a regional bank, clear up past due payables and provide access to working capital to address a substantial backlog.
As inflation began to rise in 2021, this business began to experience severe margin compression. While the company was able to pass along higher material costs on some work, it was unable to do so in the majority, especially on the large-scale projects operating under long-term, fixed price contracts. Forced to absorb these higher costs, the company’s financial performance was impacted, and cash-flow became tight. The company soon found itself in trouble with its suppliers and in default with its bank who eventually demanded it move the lending relationship.
With the help of a prominent consulting and restructuring firm, the company introduced several performance improvement initiatives and began a process to identify a new lender to replace its current one. On the strength of their highly competitive product offerings as well as the company’s relationship with one another, Briar Capital and Pathward were awarded the company’s financing business.
“I am always grateful for our partners in finance,” Jill Kirshenbaum, senior vice president of Briar Capital, said. “When I got the call from a large Chicago accounting firm, to assist with the restructuring of a Texas manufacturer, I was encouraged to know we not only have an incredible team, headquartered in Texas, but we also have an enormous network of partners in ABL who we are so lucky to partner with.”
“We are pleased to team up with Briar Capital to provide a forward-thinking, asset-based lending solution to help a mutual client and manufacturer turn around its books and stay in business,” John Trendell, a business development officer at Pathward, said. “While traditional banks may discount businesses through tough times, Pathward works closely with clients and partners like Briar Capital to identify the client’s assets and how we can creatively use those assets as credit to help them rebuild and thrive.”
With both the Briar Capital real estate term loan and the Pathward asset-based line of credit in place, the company finds itself with ample access to working capital and two supportive lenders to assist it in its growth efforts. The performance improvement initiatives instituted earlier this year are beginning to pay off, and the business is well positioned for a strong 2024.
Editor’s Note: The original version of this article incorrectly identified John Trendell as a business development officer at Briar Capital Real Estate Fund. ABF Journal apologizes for the error.
