Privately owned consumer debt collection agency.
The Financing Situation:
The Company needed capital quickly to move on opportunistic portfolio purchases as well as working capital cushion while collection curves ramped up.
SG was able to quickly get comfortable with the transaction due to the value of dedicated portfolio collateral as well as a strong personal guaranty from the owner. SG worked quickly to provide a $1.5MM funded ($2.5MM total) facility in a first lien position with interest-only payments. Closing timeframe was one week.
This transaction highlights SG’s ability to structure and underwrite collateral based / guarantor based loans. While many of you know us as a cash flow based lender, we now provide special situation (balance sheet) loans requiring creativity, flexibility, and speed to close. We also have a strong interest in providing customized solutions for illiquid high net worth entrepreneurs.
The Company: Founder-owned commercial real estate software-as-a-service (“SaaS”) platform.
The Financing Situation: The Company’s legacy business has matured to a stable level with long-term contracted customers. Through a majority-owned subsidiary, the Company is developing a complementary SaaS platform. The new platform is still in its early stages of deployment and needed growth capital to fine-tune software development and expand marketing initiatives.
The Solution: Despite the current market conditions, SG was able to get comfortable with the contracted recurring revenue of the legacy business, its mission critical software, and the counter cyclicality of the platform. SG worked quickly to provide a senior secured $4.5MM growth capital loan facility within 10 days of receiving a signed term sheet.
The Company: Founder-owned AI software subscription and services company providing a management platform for microservice-based enterprise applications. Services Revenue: $10MM | SaaS Revenue: $3MM.
The Financing Situation: The Company had successfully grown their annual recurring revenue (ARR) base from $2MM to $3MM over the course of 12 months with no outside investment. In order to raise an equity round at a high valuation, they knew they needed to drive ARR up to $5MM in 2020. This would require investment in software development and hiring additional sales personnel, but the Company was under a cash constraint due to the cyclical nature of their contracts. The majority of the Company’s contracts are tied to government agencies and therefore tied directly to the annual government budget and spending cycle. The Company needed near term liquidity to fund R&D and sales initiatives in order to achieve their revenue growth goals in 2020.
The Solution: SG was impressed with the Company’s software platform, organic growth, strong pipeline of contracted revenue, and ability to reach positive cash flow with no equity financing and minimal debt financing. SG provided a senior secured, $3MM growth capital loan structured around an ARR borrowing base and provided tailored amortization around the Company’s cyclical cash flow.
The Company: Full-service mechanical contractor located in the Midwest that provides HVAC, plumbing/piping, and other mechanical services to the commercial and industrial/manufacturing sectors. Revenue: $90 MM | EBITDA: $5 MM.
The Financing Situation: The Company recently raised capital from a private equity sponsor that has invested in several construction services businesses. The new ownership group wanted to refinance its existing credit facility, but traditional bank financing was not an option as the Company typically acts as a subcontractor on construction projects that are primarily on paid-when-paid contracts. The ownership group also wanted a financing partner that could grow with the business.
The Solution: SG Credit Partners teamed up with CapitalPlus Construction Services to provide a $13.0 MM structured factoring facility based on the Company’s strong ownership group, diversified customer base, and leverage profile.
For more information on CapitalPlus Construction Services, please contact:
The Company: Venture-backed SaaS platform for digital publishing. Revenue: $6MM | Equity Raised: $30MM.
The Financing Situation: The Company’s existing debt facility was maturing and the incumbent lender was unwilling to extend due to lender fatigue and other circumstances. SG was brought in alongside an equity contribution to refinance the debt and provide additional working capital.
The Solution: SG was able to quickly get comfortable with the business due to the contracted recurring revenue, continued equity support, and opening liquidity. SG provided a $1.5MM non-formula, structured senior secured loan. The incumbent lender successfully exited the credit as desired and the Company received additional working capital. SG closed this transaction within two weeks.
Oilfield service provider that specializes in pipeline construction and the fabrication of modularized production facility equipment to midstream operators as well as exploration and production (E&P) companies that operate in the Permian and Eagle Ford Basins.
Financial Profile: Revenue: $50mm | EBITDA: $8mm
An energy-focused holding company that provides financial, technical, operational and strategic management services to its subsidiaries across the globe.
Target Company management wanted to sell its oilfield services business for liquidity and to focus on larger infrastructure projects. Given the timing of new infrastructure projects, Target Company management wanted to sell its oilfield services business within 30 days. Target Company management had a personal relationship with Acquiring Company management and presented an exclusive, quick closing acquisition opportunity. Since the Target Company is asset light (primarily just accounts receivable with a progress billing element), an ABL facility was insufficient to close the entire deal and a bank offering a revolver + cash flow term loan would have taken too long.
SG Credit Partners (“SGCP”) was able to get comfortable with the deal based on previous lending experience with Acquiring Company management, strong historical financial performance of Target Company, and industry tailwinds. SGCP provided a $5.0 million bifurcated credit facility to close the acquisition quickly (within 3 weeks) and provide additional working capital. SGCP’s $5.0 million bifurcated credit facility consisted of a $2.0 million interest-only loan and a $3.0 million term loan. SGCP provided this structure to close the acquisition quickly and bridge the Company to a new senior lender. The new senior lender will refinance SGCP’s $2.0 million interest-only loan and SGCP will then subordinate its $3.0 million term loan under its typical second lien structure.
Non-VC/sponsor backed cloud-based video storage provider for smart home devices.
Revenue: $10mm+ run rate | EBITDA: Break-even
The Financing Situation:
The Company was searching for a non-dilutive capital solution to help finance continued growth – customer acquisition costs and new data center facility capex. Bank financing was not an option given a combination of the Company’s non-institutional ownership and current financial performance. ABL financing was not an option given the Company’s direct-to-consumer model.
SGCP was able to get comfortable with the Company’s lack of historical profitability given the growing monthly recurring revenue, data center assets, and dedicated entrepreneur. SGCP provided a non-dilutive $2.0 million senior secured loan that will enable the Company to continue rapid growth while preserving existing shareholder equity.
Cloud-based media monitoring and intelligence platform with contracted, recurring revenue.
Revenue: $15mm | EBITDA: $1.5mm | Equity Raised: $10mm
The Financing Situation:
The Company had a line of credit as well as a term loan in place with a Bank. Due to lender fatigue and technical default (financial covenant compliance) the Bank wanted to exit the credit.
Super G was able to get comfortable with the business due to the recurring revenue, continued equity support, and strong management team. Super G provided a $2.0 million bifurcated credit facility to retire the Bank’s credit facility as well as provide additional working capital. Super G’s $2.0 million bifurcated credit facility consisted of a $750k interest-only loan and a $1.25 million amortizing term loan. Super G provided this structure to bridge the Company to a new senior lender. The new senior lender will refinance Super G’s $750k interest-only loan and Super G will then subordinate its $1.25 million term loan under its typical second lien structure.
The Company: Sponsor-backed, cloud-based software platform primarily marketed to outbound sales organizations.
The Financing Situation: The Company raised over $3MM in a Series A equity round and experienced significant growth over the prior three years. The Company needed growth capital to execute on its sales pipeline, but did not want to raise additional equity before its Series B round due to dilution concerns at the current valuation. The Company wanted to grow revenue as much as possible in order to increase its valuation prior to raising additional equity.
The Solution: Super G provided a non-dilutive senior secured term loan. This structure enabled the Company to continue its growth trajectory and increase its valuation before raising additional equity. Super G was able to quickly get comfortable given the rapid growth, contracted recurring revenue and strong management team. The amount of time from signed term sheet to closing was less than two weeks.
Super G’s non-dilutive growth capital loans help technology companies extend runway and reach milestones which increase valuation while protecting equity.
Venture-backed SaaS provider for content management and digital publishing.
Revenue: $8mm | Equity Raised: $22mm
The Financing Situation:
The Company was placed in the Bank’s special assets division due to a covenant violation. Although the Company continued to perform, the Bank wanted to exit the credit. Super G was brought in to offboard the client and provide additional working capital.
Super G was able to quickly get comfortable with the business due to the contracted recurring revenue and equity support. Super G provided a $1.5mm highly structured, nonformula-based, senior secured loan. The Bank successfully offboarded the client as desired and the Company received additional working capital.