Background:
Known across the Western portion of the U.S., this well-established, successful provider of heavy lifting and rigging services was experiencing a period of rapid growth and needed access to additional capital to support their growing project load.
Because the company provides equipment and operator personnel for their jobs and customers, they needed capital for additional equipment purchases and expanding payroll.
Financing Solution: Asset Based Loan
Initial Amount: $8 Million
Location: West
Industry: Crane Rental and Sales Company
Problem:
The company had an existing $4 million line of credit with their local bank and requested that the line be increased, ideally to $8 million. Despite accounts receivable increasing to cover the requested line increase, the bank was unwilling to increase the line because of the rapid growth of the company. The crane company needed a financing partner that understood the industry in which they operate and could provide the monetary resources to support existing cash flow needs and future growth.
To compound matters, they needed a funding solution within 30 days.
Solution:
Given the size of the company, the high volume and value of physical assets and the large size of their accounts receivable, the Commercial Funding team determined that an asset based loan (ABL) would be most beneficial. An ABL would provide the flexibility and growth potential desired by the company. The biggest hurdle was to deliver initial funding within the short time frame needed.
CFI informed the company principals that if they could commit to getting the required documentation to the CFI underwriters quickly, CFI could meet the timeline. Within three days of the initial discussion, CFI had the application, then provided a letter of intent (LOI) back two days later.
The CFI team then conducted a site visit, arranged a third-party collateral evaluation, underwrote, and cleared UCC filings. Within 29 days of the initial discussion, CFI paid off the existing bank and provided an $8 million credit facility to the company, meeting the company’s funding deadline.
Results:
CFI’s asset-based loan achieved the following goals:
- Provided the influx of working capital required to meet immediate cash flow needs
- Gave the company a long-term source of capital that could grow as the company grew
- Allowed the company to purchase additional equipment and hire additional operators, allowing them to take on additional projects and customers
Since initial funding in late 2021, the ABL facility has been expanded multiple times, allowing them to grow their revenue over 200% and their credit line extended to 16 million.
