COLLATERAL CREATIVITY

This New Jersey based company was financed by a commercial finance company that had been acquired by a much larger finance company. As a result, they were no longer a fit for the larger entity and asked to find another alternative. In the meantime, their line was frozen, but their backlog was growing. This created a strain on working capital and cash flow and jeopardized both their customer and vendor relationships.

Lighthouse was able to refinance the line completely and create significant additional working capital by providing a term loan against machinery and equipment and including the collateral of an affiliated company on the borrowing base. The company was able make additional payments to vendors and get back to work.

INCREASED WORKING CAPITAL

The company purchased the assets of a prior manufacturer through a 363 bankruptcy sale utilizing a factoring product. A new management team was brought in with the goal of reestablishing the prior sales base and developing an ethnic line of frozen food offerings. As the new management team gained traction, sales grew creating greater working capital needs that could not be supported by the factor.

Lighthouse was able to structure an aggressive facility against accounts receivable and inventory that improved upon the existing structure thus increasing working capital availability to support sales growth as the company continues to gain momentum after the 363 bankruptcy sale.

RESPONSIVENESS-LOAN PARTICIPATION

The company was financed by a local bank and had recently suffered through a couple of tough years due to the recession. However, sales were increasing and profitability had returned. Due to the effect on the balance sheet created by losses during the recession, the bank was unable to increase their existing line of credit.

Lighthouse was able to close the original line of credit in the amount of $2,000,000 in under thirty days. Then sales took off. By the end of the first year of the relationship, Lighthouse had increased the facility to $3,500,000. When the borrowing need reached a level beyond Lighthouse’s internal hold limit, a participant was brought in to support the transaction. Lighthouse was able to secure the participation within one week. The transaction was seamless and the client did not “miss a beat”

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.