Deals Don’t Always End Up the Way They Start Out

Every deal is different. Every deal has challenges. Some of the challenges (and possible solutions) are known up front; others come out of due diligence. ABLs must be willing to work through the challenges and come up with creative solutions if they want to continue to get referrals. Here are two challenging Celtic Capital examples:

  1. This company gave extended terms to some of its customers. That meant we would need to lend on the accounts receivable for longer than we normally would like. To overcome our trepidation, we asked the owner to pledge some real estate and because he was willing to do so, we lent against the extended term customers and were more aggressive on the equipment component of the deal. The equipment appraised for less than was required but we agreed to lend 100% of forced liquidation value because of the real estate backup.
  2. This company’s equipment appraised significantly below what we thought it would; the reason being that the original list included encumbered equipment. To make up for the shortfall, we gave more on the inventory. We felt comfortable going heavier on the inventory based on the results of our audit.

As seen in these examples, things may look one way up front but oftentimes, take a turn and come out differently. At Celtic Capital, we’re always willing to skin the cat in different ways to create more availability and make deals work.

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, or visit us at