Loans are our only product. Our ability to be more flexible results from not being regulated like a bank because our funding is not coming from depositors. Also, our deeply experienced team is laser focused on the mission of helping companies create jobs.
Current portfolio loans range from $90,000 – $600,000, and loans larger than $600,000 are possible through syndication. Loan structures are created to suit the needs of the borrower, and fall into variations of Term Loans, Lines of Credit, Asset Based Lines of Credit, Purchase Order Financing and SBA-backed loans. Term loans may allow an interest only period if the business needs to build cash.
Preliminary interest can be established within a week of receiving basic financial information and meeting with management. Once a prospective borrower has provided all the requested information, formal approval and a closing can be accomplished within 30 – 60 days.
A proactive management team and a thoughtful plan substantiating the ability to repay the loan. The first pass of information needed includes historical financial data, projections, a sources / uses summary, and a personal financial statement.
Not necessarily. However, collateral availability permits more attractive pricing and makes a big difference if historic profitability has been weak or inconsistent.
In most cases, yes. Our loans are often not fully secured, and a personal guaranty reinforces confidence in the business’s ability to repay the loan.
Yes, our loans frequently supplement bank borrowings.
Every deal is different. We don’t compete with banks on low risk loans, and when we’re asked to assume greater risk, we charge a higher rate. The borrower needs to consider whether the value created by the loan proceeds justifies the cost.
No. We are committed to considering any loan request from any borrower that makes fundamentally sound business sense; however, we cannot take speculative equity risk.
Our debt can create availability and/or provide additional liquidity. For instance, we will term out a portion of an evergreen line of credit to create availability.
Payments on a BDC loan can be suspended when a company is experiencing unforeseen challenges. Halting the loan payments alleviates some of the debt service pressure, hence the BDC debt can be considered quasi-equity.
All lenders consider the ability to manage personal credit as indicative of the ability to manage a business’s finances. Credit scores above 650 are satisfactory, but we have accepted lower scores when they result from life events (e.g. illness, divorce).
We commonly charge one percent of the loan amount to cover our underwriting costs. Legal fees typically range from $3,000 to $5,000 depending on the complexity of the transaction. Appraisal fees may be required if a transaction involves real estate.
A financial covenant is an agreement between the lender and borrower that the company will operate within certain parameters. The borrower’s projections play a key role is setting the covenants. We usually require a minimum debt service covenant which measures the borrower’s ability to repay the scheduled principal and interest payments on all debt.
Yes, provided the borrower otherwise meets our approval criteria.