CGCF worked to create a custom lease financing which allowed the client to maximize cash flow and eliminate execution risk while financing collateral most lenders would not fund.
|Equipment:||Manufacturing production lines, including mixing and blending, extrusion, hopper, and scrap recycling.|
|Lessee:||Privately held, manufacturers insulation products and accessories for indoor and outdoor commercial and industrial applications.|
|Transaction:||$11,758,923 structured as a custom lease financing which included the management of three different subcontractors, coordination of multiple progress payments over a six month period, and the funding of a significant amount of soft costs including delivery, installation and training.|
The client is in growth mode and in order to meet opportunistic market demand for its product the client needed to double its manufacturing capacity; expanding its current facility by 360,000 square feet and hiring an additional 100 employees.. This represents sizeable CapEx investment relative to the company’s revenue base. Furthermore, the vendors for the equipment purchases are located in Asia and require progress payments be made to them prior to the equipment being shipped to the US. The client was only interested in working with one lender on the project and didn’t have time to go down multiple paths to determine who could get all of the CapEx funded in a timely fashion. The client attracted the attention of many prominent lenders around the country. During the process, the client quickly learned that most traditional equipment finance lenders had a difficult time becoming comfortable with used collateral, foreign vendors, progress payment requirements, high growth companies and international parent ownership. Any one of these items is difficult for a bank to approve, not to mention all of them in one account.
Through a series of calls and in person meetings, CGCF was able to demonstrate its expertise in structuring a comprehensive solution to the customer as a relationship and account versus a one off transaction.
CGCF worked closely with the client’s senior finance and leadership team to understand all of their needs, ownership structure and their business and was able to structure a long term and competitive rate, along with a personal touch, genuine interest and level of service required to earn the business.
How did financing play a key role? What unique benefits did they receive?
CG Commercial’s extensive knowledge of the manufacturing industry and ability to perform a comprehensive and thoughtful due diligence on the company, ownership, and vision resulted in its ability to structure the winning transaction for a lease line of credit that the client can utilize for a wide variety of production lines and equipment types. Through a strong relationship and a detailed needs assessment, CGCF was able to identify the client’s major requirements and meet their needs. The funding of the equipment will ultimately increase the company’s product offering, increase inventory, gain additional market share, increase capacity and production will increase revenues.
CG Commercial was also able to approve the overseas equipment broker and process payment before shipping.
By providing an extended term and providing capacity via a lease line of credit, CG Commercial Finance was able to significantly improve the client’s cash flow and eliminate execution risk. CG Commercial Finance was able to:
The client has already provided a deposit to CGCF for their next equipment lease transaction, and CG has indicative interest for another $30MM in capacity for the client’s future needs.