A CFO meets with the executive committee to discuss a product line expansion. The expansion represents a huge opportunity to take share in a weak market and their manufacturing discipline should allow them to achieve accretive returns quickly. But secretly, the CFO is freaking out because he knows the bank group is going to rain all over this thing. First, let’s evaluate what this is going to do to our cash reserves, leverage and the like so we don’t lean on covenants. Then, a 21-month build and install cycle with parts coming in from 4 countries that have no collateral value whatsoever until the build is complete and asking for $30MM to pay for it will be weird to say the least. Maybe he’ll hide it in cash and the revolver and hopefully get it taken out later. Maybe he’ll take on the headache and congressional act of issuing some debt. Maybe the bank group won’t look for an excuse to turn up their noses at the opportunity. Right. Have you been down a road that feels like this one?
Scary Equipment & Projects.
Unique equipment and projects like this one are extremely important for the growth of your business. But is a post-GE Capital/Industrial Finance Company world, many CFOs find themselves walking into executive committee meetings talking about all the things that are not possible in today’s “new normal”. They explain that there is now a nearly trillion dollar void in annual project funding that must now be powered more by equity than debt. And we all remember the difference between the cost of equity and debt. Banks aren’t the bad guys really, they just aren’t positioned to take the risk left by the industrial finance companies. Over-regulation and all. So the management team is left with the assumption that a trailer load of capital in-house is required before moving forward.
Assumptions can be dangerous.
Don’t assume that all lending solutions have fallen to the tightened screws of traditional banking. The exit of the Industrial Finance companies have undoubtedly left a void in the marketplace, but that doesn’t leave you without alternatives for funding the complex project. And no, acting as an in-house capital markets loan syndication team is not the answer either. Seek the dealmaker. The master craftsmen. The tax, accounting, complex project, equipment funding experts that want projects the bank group is a bit hesitant about. And marry that with a unique funding structure offering nearly unlimited funding abilities in a wider range of credit situations. I wonder, maybe, if we could be describing….
CG Commercial Finance
At CG, we are an out-of-the-box complement to your bank group for financing the assets and projects that power your growth. Bring us your cash strapped, equity pressured projects and unique equipment passed on by the banks but yearning to be free. Our company offers a different story than the mass of me-too lenders calling your company, so reimagine what’s possible…and get the deal done with CG.