FINANCING CREATIVITY

This manufacturer had historically succeeded in the women’s hosiery segment. However, this market had been in decline for many years, and the company needed to diversify. The decision was made to enter the medical compression hosiery business by partnering with an investor to establish an affiliated company. The company would manufacture medical compression hosiery and sell to the affiliate. However, the affiliate was not interested in becoming a co-borrower for a new facility.

Lighthouse designed a structure where the company purchased invoices from the affiliate and then assigned them to Lighthouse. This in combination with an aggressive structure on the accounts receivable, inventory and machinery and equipment improved the company’s working capital position tremendously allowing it to aggressively pursue new sales opportunities.

EXIT FINANCING

This company suffered as a result of the decline in the domestic textile industry. As a result of several years of losses, the company’s existing lender eliminated the inventory portion of their borrowing base creating additional cash flow strains. The company was forced to file for Chapter 11 Bankruptcy protection. Working with seasoned turnaround professionals, the company was able to reorganize and sought confirmation from the court to exit bankruptcy.

Lighthouse was approached by the counsel of the company and asked to support the exit by providing a line of credit. Based on the turnaround and restructuring completed by management and the consultants, Lighthouse was able to structure a line of credit that completely paid out the existing lender and created additional working capital availability.

DEBTOR-IN-POSSESSION

This Ohio based plastic injection molder was greatly impacted by foreign competition particularly from Chinese imports. As a result, the company was unable to cover their fixed overhead expenses related to three manufacturing facilities. A turnaround consulting firm was engaged, and the decision was made to consolidate the three facilities into one and reorganize the company through a Chapter 11 Bankruptcy.

Lighthouse was approached by the consulting firm and asked to support the reorganization by providing Debtor In Possession or DIP financing. Lighthouse was able to structure a line of credit secured by accounts receivable, inventory, and machinery and equipment that supported the company’s working capital needs while it sought confirmation of its reorganization plan from the court

ACQUISITION FINANCING-RESPONSIVENESS

The company embarked on a growth strategy just ahead of the recession including the purchase of a much bigger facility. Because of the economic conditions resulting from the recession, the company’s sales dropped to a level where the fixed expenses could not be covered leading to multiple years of losses. As a result, their existing bank foreclosed on the assets.

The financing was requested by a prior customer of Lighthouse seeking to expand his existing presence in the metals distribution segment by acquiring the assets out of foreclosure. Timing was critical in that the transaction had to be completed ahead of a scheduled auction. Lighthouse was able to structure, close, and fund the transaction within thirty days from the initial start of due diligence.