BDC Capital is the only fully integrated loan and investment company serving the complete needs of small and mid-sized businesses. Through its five offices around New England, BDC Capital is unique in combining multiple financing and investment vehicles in a single company. Below are some examples of how BDC Capital was able to provide innovative financing solutions.
BDC Capital Provides $1 Million Working Capital Line of Credit
Overview: A lumberyard and hardware store business with 5 locations and sales of approximately $70 million had operated profitably for numerous years. When the housing recession hit, the company, like many in the industry, faced the need to significantly downsize. The company successfully navigated this period and currently operates a profitable business from a single location that is once again growing.
Challenge: In April 2012, BDC Capital was approached by a banker who was evaluating the Company’s request for working capital. The company was rebuilding its business but lacked sufficient, historical profitability over the past two years to attract conventional financing. BDC Capital was familiar with the industry and felt comfortable in providing financing for this early stage turnaround.
Solution: BDC Capital responded by providing a $1 million asset-based, revolving line of credit for working capital. This fully-followed facility is collateralized with a first lien on A/R and inventory. The new working capital line has given the company substantial availability, allowing management to execute their plan of growing the business. The referring bank has landed a new client by providing lock box services and other banking services and was able to differentiate itself from its competitors by offering a viable solution to the company’s financing needs.
If you would like to explore ways to land additional business for your bank without taking on undue risk, give us a call at 781-928-1100 to explore how a partnership with BDC Capital can help.
Challenge: A trailer company that distributes, services, and leases trailers as well as sells trailer related parts, wanted to recapitalize the company and provide working capital for an expansion of the business.
Solution: BDC Capital provided a $750,000 revolving line of credit for working capital, with a new bank handling all cash management requirements, a $2,250,000 term loan for debt refinance and new capital expenditures, and a $1,500,000 mezzanine investment to assist in the recapitalization of the company. This financing package allowed the borrower the benefit of increasing their cash flow by lowering the monthly debt service requirement.
Senior Term Loan
Challenge: A not-for-profit mental health and substance abuse center needed funding for potential cost overruns and the permanent take out of a construction loan.
Solution: A $1,000,000 term loan, of which $400,000 was allocated to cover potential cost overruns and $600,000 to be used for the permanent take out of the existing construction loan.
Working Capital Line of Credit and Term Loan
Challenge: A national distributor of liquid propane gas equipment and grill and hearth products sought to refinance after the 2009 downturn in the economy.
Solution: A $7,000,000 revolving line of credit participated with two banks, as well as a $2,000,000 term loan. Cash management was arranged with a participating bank and the borrower was able to improve profitability by more than 50%.
Challenge: A private equity firm approached BDC Capital to participate in a leveraged buyout of a custom plastics injecting molding company.
Solution: BDC Capital provided a $1,750,000 participation in the $5,000,000 total investment from the private equity firm. This allowed the borrower the ability to lower their interest expense and enable the purchase of three more injection molding machines to foster the increase in sales.
Challenge: A utility contractor wanted to acquire an existing asphalt plant and paving business.
Solution: Because the asphalt plant accepts and utilizes a significant amount of recycled materials as a feedstock, this project was eligible for a $300,000 loan under our Recycling Loan Fund. The borrower was able to reduce their material costs, which increased their gross margin by 10%, and improved their bottom line.