Sterling Construction announced the company closed a new financing. The new $40 million facility with Nations Equipment Finance will be secured by Sterling’s equipment.

Total debt financing as part of the four-year agreement includes up to $40 million, comprised of a $20 million term loan and up to a $20 million revolving credit line. Availability will be determined quarterly based on a 65% advance rate of the appraised value of the collateral pledged.

The initial interest rate is 12% with pricing criteria that could cause the rate to decrease or increase by two percentage points based on fixed charge coverage ratio performance.

Thomas Wright, Sterling’s EVP and CFO, stated, “We are pleased to have closed a new financing with Nations Equipment Finance to replace our previous credit facility. The new agreement carries no financial covenants, which gives us the flexibility to fund our ongoing operations without disruption for the foreseeable future.”

“Completing our new financing arrangement was a major step in our turnaround process,” stated Paul Varello, Sterling’s CEO. “This new credit facility will enable us to continue to implement the operational improvements that we have underway. By securing this financing we can now focus our attention entirely on bidding and executing effectively on attractive construction projects in order to achieve sustained profitability and drive increased shareholder value.”

Sterling is a heavy civil construction company that specializes in the building and reconstruction of transportation and water infrastructure projects in Texas, Utah, Nevada, Arizona, California, Hawaii and other states.