Commercial Finance Partners (CFP), a debt advisory and direct lending platform, has closed a $750,000 accounts receivable purchase facility for a St. Louis-based contract security services company that recently completed a change-of-ownership acquisition financed with an SBA 7(a) loan. The acquisition was a second-generation family transition, with the incoming owner acquiring the business from his father and his father’s partner.
The referral came directly from the SBA lender, which wanted the borrower to have a working capital facility in place at closing rather than carry additional term debt. Because the lender held a blanket first lien on all business assets, the structure required an intercreditor agreement subordinating accounts receivable and inventory to CFP while preserving the lender’s first position on all remaining collateral. CFP executed the subordination concurrently with the SBA closing and funded the first advance from its own balance sheet the day after documents were signed, at a 90% advance rate against eligible receivables.
“The SBA lender brought us this deal, and that is where a lot of our AR volume is coming from right now,” John Buanno, president of CFP, said. “Banks and credit unions want their borrowers walking out of a closing with liquidity, not with more term debt. The piece that usually slows these deals down is the subordination — we do a lot of them, and we can get an intercreditor executed on the same timeline as the 7(a) closing.”
