Every business and situation is unique. We work with closely held and family businesses to keep them from being overwhelmed with the array of financing options in the market. Most companies we arrange financing for want to acquire a business, buy out a partner, or finance a dividend. There are many choices among commercial banks, private lenders, and SBA credit providers. We assure clients that they are not missing out on potential options while they stay focused on running their business.
Not all commercial banks provide conventional leveraged financing, but we have developed several trusted relationships with experienced lenders. There is a great deal of variability in the credit profile that banks like depending on geography, industry, and leverage.
Over 3,000 bank and non-bank lenders in the US are administering multiple SBA programs. Although lenders administer many of the same programs, there is a material difference in each bank’s interest rates, loan amounts, and equity requirements.
Private Credit Funds are investment vehicles that raise capital from institutional investors, including pension funds, endowments, insurance companies, and high-net-worth individuals. Their goal is to provide debt financing to private companies. The loans offered by these funds can vary greatly and may include senior secured loans, mezzanine debt, subordinated debt, unitranche loans, or other customized financing options.
A Small Business Investment Corporation (SBIC) is a privately owned and managed investment firm licensed and regulated by the U.S. Small Business Administration (SBA). SBICs are specifically designed to provide funding and support to small and medium-sized businesses (SMBs).
Asset Based Lenders are more focused on the quality and value of the company’s collateral. Ultimately, they will lend against the underlying appraised value of Accounts Receivable, Inventory, Machinery, and Equipment with less focus on the business’s profitability and leverage. There are bank and nonbank ABL providers whose fees, rates, and amount of capital have a high degree of variability.