eCapital funded an $18 million asset-based lending facility for a commercial linen provider servicing the food and beverage, hotel, agriculture, industrial and healthcare sectors. After completing an acquisition, the company faced covenant violations with its current bank lender due to the sizeable inventory investment required to get the newly acquired company up and running. The bank lender considered the inventory purchase a fixed charge, resulting in a reduction in availability and jeopardizing the company’s operations and the interests of stakeholders, including the financial sponsor and mezzanine lender.
eCapital stepped in with a customized asset-based lending solution that took into account the nuances of financing linen goods. A deep understanding of the product lifecycle enabled eCapital to provide vital support to the struggling company. A referral from a bank mezzanine group laid the foundation for collaboration.
Through thorough evaluation and customized finance structuring, eCapital engineered a flexible facility that not only relieved immediate pressures but also paved the way for sustainable recovery.
“This transaction was the result of collaborative partnerships with the banker, financial sponsor, mezzanine lender and eCapital, all working together to prioritize the client’s needs,” Brian Cuttic, CEO, ABL at eCapital, said. “Our ability to understand the unique characteristics of their industry, along with the increase in availability played a critical role in meeting the company’s urgent requirements. The client’s confidence in our proven track record led to the referral, and we were pleased to deliver tangible support when it mattered most.”
