Manufacturer for the Auto Industry “Driven” for a Fast Funding
The Company
This Company is an Oregon-based manufacturer and distributor of electrical and mechatronic parts for the automotive industry. It’s owned by a variety of equity groups.
The Situation
COVID-related losses led to loan covenant violations and the need to refinance the Company’s bank debt. When Company assets did not provide enough availability, the CEO negotiated a discount with the bank to make the numbers work. The bank’s condition: the deal must close by Monday, October 31st; three and a half weeks away. Celtic Capital had no problem with that timeline providing the third parties (two landlords and a mezzanine lender) signed off quickly. The landlords signed their Agreements right away; the mezzanine lender did not. Add to that the fact that the CFO (needed for the signing) was scheduled to be out of town the last week of October – another delay. The CEO explained to the bank why the deadline could not be met and asked for more time. The bank extended the deadline to Wednesday, November 2nd.
All through the process, Celtic Capital and the Company CEO did all they could to meet every deadline. The mezzanine lender’s redline did not come in until Friday, Oct. 28th with quite a few comments that had to be sorted through. Mark Hafner, Celtic Capital’s President and CEO, spent the weekend and the next few days working with his attorney and the lender to finalize the subordination. All the while the Company’s CEO was communicating with the bank who said if the deal didn’t fund by Friday, November 4th, their discount would be rescinded.
The Solution
On November 4th, Celtic Capital funded a $1,000,000 Accounts Receivable Line of Credit, $500,000 Inventory Line of Credit and a $152,000 Equipment Loan.
The Result
The Company’s CEO said he specifically chose Celtic Capital because of its ability to fund deals quickly. Normally, three and half weeks is absolutely doable for Celtic Capital. As this deal demonstrates, even when third parties drag their feet, Celtic Capital’s diligence and tenacity pays off for its borrowers.
With setbacks from COVID behind it, and new financing in place, the Company is poised for a comeback.
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.