Rosenthal & Rosenthal completed a $5 million revolving line of credit to an industrial maintenance and repair company and a $1.5 million asset-based loan facility for a distributor of electrical cable.
The family-owned industrial maintenance and repair company showed losses on its 2018 financials. When the company was forced to cut ties with its existing bank lender, it began looking for an alternative lender to fill the gap in funding, so its financial advisory firm introduced the company to Rosenthal. Looking closely at the company’s side collateral, 2019 profitable operations and the owners’ long-term track record running the business, Rosenthal got comfortable with the deal quickly, even with a state tax lien on record. While COVID-19 shutdowns prevented Rosenthal from obtaining a subordination from the tax authority, the firm built in satisfactory reserves and funded a $5 million revolving line of credit for the client.
“Because Rosenthal is private and we aren’t restricted by regulations and red tape like other institutions may be and we can be a little more flexible,” Rob Martucci, senior vice president of underwriting and business development in Rosenthal’s asset-based lending division, said. “This deal is a perfect example of why it’s important to look beyond the numbers when evaluating a potential client. Businesses are more than just a balance sheet, and we always take the time to learn about and understand the companies we lend to.”
The distributor of electrical cable is based in Texas. The company distributes electric cable used in the manufacturing of large overhead and building cranes. The company experienced double-digit sales growth and could no longer finance strictly with its own capital. Since its founding in 2015, the company had never taken on bank financing or debt and had never borrowed in the past. Its German partner had been providing financial support, but there was a need for the company to stand on its own and leverage its rapidly growing accounts receivable and inventory assets.
Management soon began looking for an asset-based lending relationship and a substantial line of credit. Given where the company was in its life cycle and growth trajectory, a third-party consultant introduced the company to Rosenthal.
Rosenthal analyzed the company’s corporate tax returns and did a deep dive into the collateral to determine that the assets were of a quality nature. Rosenthal provided a $1.5 million asset based loan facility, which would allow the company to secure additional trade support to further its sales growth.
“Clients often come to Rosenthal because our independence allows us to evaluate deals and make decisions swiftly but thoughtfully,” Robert Schnitzer, senior vice president of business development at Rosenthal, said. “When a company is on the threshold of a major growth opportunity, they don’t always have the time for a lengthy review process with various layers of approvals. Rosenthal is still family-owned and run, and our clients benefit from that structure from the very outset of our partnership with them.”
Rosenthal & Rosenthal is a factoring, asset-based lending and purchase order financing firm in the United States.