Superior Drilling Products completed a new $3 million credit facility comprised of a two-year, $2.5 million accounts receivable revolving credit facility and a $0.5 million asset-based term loan amortized over five years.

According to a related 8-K filing, Federal National Commercial Credit is the lender.

The company can subsequently request evaluation by the lender for a prospective inventory loan to be effective as early as six months after closing.

The borrowing availability under the revolver is up to 85% of eligible accounts receivable with customer concentration capped at 60% and has a variable interest rate of prime plus 1% plus a monthly service fee of .48%. The term loan’s interest rate is prime plus 5% plus a monthly service fee of .30% with principal and interest payments due monthly for the 60-month period.

The obligations are secured by a first lien security interest in all of the personal property of the borrowers.

Commenting on the credit facility, Christopher D. Cashion, chief financial officer of Superior Drilling Products, said, “The completion of this credit facility is a testament to the quality of our customer base as well as the lender’s confidence in our future. With this flexibility, we have the needed working capital to invest in expanding our inventory of tools to meet expected growth in demand.”