Continued Losses Fueled by COVID-19 Led Banker to Refer This Company to His “Go-To ABL Guy” at Celtic Capital
This is a California-based distributor and fabricator of sheet metal products and industrial supplies. The Company’s roots can be traced back 100 years and it’s been family-owned and operated since 1974.
Having lost money last year, the Company was in violation of its bank covenants. With the expectation of more loses this year, the bank asked this client out. The bank had a number of loans with the Company which were either re-structured into real estate loans or paid off with other owner resources; however, receivables and inventory lines still needed to be addressed.
With the banker’s multi-year relationship with Celtic Capital’s local Client Development Officer, who he calls his “go-to ABL guy,” he referred Company management to us. Working closely with the Company, we were able to overcome the logistical challenges of conducting our due diligence during the COVID-19 pandemic and ultimately provided the Company with $3,200,000 Accounts Receivable and Inventory Lines of Credit to pay off the bank and for working capital.
The Company wasn’t in that bad of a shape going into our deal, and it has a very good reputation. The pandemic hit Company sales to some extent but management reacted appropriately by making the changes necessary to minimize any negative impact. The Company received PPP money but hasn’t had to dip into those funds yet. It’s anticipated that those funds will hold it over until there’s an uptick in sales.
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.