Financing Entry into a New Market

The Situation

Although industrial textiles, one of the last vestiges of the local textile industry, had evolved into a highly competitive, low margin industry, Coventry-based Concordia Fibers maintained profitability by investing in automated equipment. But even with a strong reputation for making high quality, continuous filament yarns, Concordia's management knew it had to continually find new markets.

About the Opportunity

Working with a strategic partner, CEO Randy Spencer and his management team identified an opportunity to diversify into medical textiles. They took action by developing a new product line and hiring an experienced medical industry professional to help sell into the medical industry.

Concordia's BIOFELT product line, a range of absorbable 3D non-woven felt scaffolds that foster rapid cell growth for use in tissue engineering applications, required new production equipment. Despite obtaining funding from current company stockholders, and a $150,000 equity investment provided by the Slater Technology Fund, Concordia needed more financing.

Why the BDCRI Got Involved

We decided to provide Concordia with a $300,000 term loan to finance new equipment and working capital, because:

1. Core manufacturing operations would generate cash flow to help get the new business off the ground.
2. Arthur Burghouwt, a well respected medical industry veteran, brought a solid knowledge of medical textiles and had a proven track record in launching new products.