The Company: Industrial recycling company that sells processed and unprocessed materials to domestic and international mills, foundries, and other material processors. Ownership: Family-owned. Financial Profile: $40 million of revenue.
The Financing Situation: Management was exploring a sale of the Company and needed additional working capital beyond the availability on their asset-based credit facility. SG was approached by the Company’s bank ABL to provide a second lien working capital loan to enable the Company to run a sale process without any potential for liquidity shortfalls.
The Solution: SG Credit Partners was able to quickly get comfortable with the Company’s financial profile and provided a $1.5 million loan with interest-only payments to give the Company maximum liquidity throughout the sale process. The loan funded within three weeks of a signed term sheet, alleviating liquidity constraints and allowing management to focus on selling the Company.
SG Credit Partners’ second lien loans can help senior lenders close deals (onboard new clients), offer a liquidity solution when unable to lend up (retain existing clients), and/or solve out-of-formula / technical default issues.