Equipment-Only Loan for AZ Archery Company Is on Target
The Company
This is an Arizona-based designer and manufacturer of a complete range of archery equipment for all segments of the sport.
The Situation
Impacted by COVID-19, the Company suffered losses and upon breaking covenants, its bank asked the Company out. Management connected with an intermediary to help secure replacement financing for its accounts receivable (A/R), inventory and equipment – heavy on the inventory. As the inventory ask was twice as much as was needed for the A/R, a level at which we do not lend, we discussed with the intermediary the idea of Celtic Capital financing the equipment while another lender financed the A/R and inventory.
The intermediary found a revolving lender that could meet the needs of the Company and came back to Celtic Capital to move forward on our idea of providing an Equipment-Only Loan. With no equipment list, we proposed on a number management gave us.
The Solution
In aggregate, (for the A/R, inventory and equipment) there was more than enough to pay the bank off. As a first step, the bank subordinated the equipment and Celtic Capital fulfilled our segment of the deal by providing a $1,000,000 Equipment-Only Loan; the funds used to pay down the bank. The revolving lender’s financing is still in play and once completed, the bank will be paid off in full.
The Result
2022 sales were down even further than in 2021; however, with all COVID-19 and supply chain disruptions behind them, the Company is projecting a 20% increase in sales this year. This will bring it back to pre-pandemic levels and profitability.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.
If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or mhafner@celticcapital.com, or visit us at www.celticcapital.com.