Business Hard-Hit by COVID Now Back on Track
This Company is an Oregon-based manufacturer of custom retail fixtures.
Referred to Celtic Capital by a workout banker, the business was hard-hit by COVID such that the retail aspect of the business shut down. The construction side of the business remained busy but as a whole, Company sales declined by more than half. These losses prompted the bank to ask this client out.
Upon evaluating the Company’s accounts receivable and equipment, there was a shortfall in paying the bank off in full. Mark Hafner, Celtic Capital’s President and CEO came up with a solution whereby Celtic Capital would provide a $1,000,000 Accounts Receivable Line of Credit and a $630,000 Term Loan to pay the bank down and that the Company take out a second lien loan to pay off the remainder owed to the bank. The bank still held some additional collateral, so it was willing to subordinate to us.
The process took time for two reasons: first, the bank gave the Company a 90-day extension of which the Company took all 90 days, and second, the Company, having never done an ABL deal before, was very methodical about making sure all of its cash flow issues were resolved. We worked with management through the process and once they were comfortable, we funded our facility, and they pulled the trigger on the second lien loan.
As of second quarter 2021, the retail side of the business started picking up and it’s continued to make significant progress. Revenue will be up well over 2020 levels and next year, it is predicted to be back to pre-pandemic levels.
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.