“This new facility further strengthens our balance sheet and provides additional financial flexibility,” Andy Shape, president and CEO of Stran & Company, said. “We look forward to prudently deploying this capital to support our long-term growth objectives. Stran is excited to enter into this relationship with a historied local institution such as Salem Five and grow together in the future.”
The secured revolving line of credit is a 12-month, interest-only loan with an interest rate of the prime rate plus 0.5% (currently 3.75%). The amount available under the line of credit is limited by eligible inventory and accounts and subject to meeting a debt service coverage ratio and minimum net worth. Stran & Company must meet other ongoing affirmative and other obligations during the loan term. The company may freely draw upon the line of credit subject to Salem Five Bank’s right to demand complete repayment of the withdrawn amounts and incurred interest at any time. The loan is secured by all assets and property of Stran & Company, including inventory held in rented warehouse space on behalf of its customers.
Founded in 1855 and headquartered in Salem, MA, Salem Five Bank is a mutual savings bank with almost $6 billion in assets.