Porter Capital, a provider of accounts receivable financing for business, recently provided a $3 million A/R credit line to a distributor of aerospace parts for the military and commercial industries.
Porter’s contribution comes alongside $2.5 million in inventory financing from Crossroads Financial, a $500K term loan from Change Capital, and $3.7 million from an SBA.
The deal was first introduced to Porter through a broker, with the distributor looking to replace a bank’s line of credit and buy out the existing private equity firm with an SBA Loan. After beating out a competing A/R lender for the deal, Porter brought in the other parties to produce enough liquidity to take out the senior debt and fill in a funding gap after the inventory appraisal came back short.
“By working with our trusted partners at Crossroads Financial and Change Capital, we were able to make this complex and time-sensitive transaction a success. Through our joint efforts, all parties were able to close on the same day,” Andy Dillard, SVP, business development officer at Porter, said.
If not completed by a specific date, the transaction would have fallen apart as the minority owner would lose the option to purchase the company’s shares at a favorable valuation. Luckily, all parties funded the $9.7 million requirement into an escrow account to be disbursed to the appropriate parties on the day of funding.
Today, the sole owner can focus on growing the company without honoring restrictive debt and equity covenants.
