Other (Agriculture, Education, Food & Beverage, Healthcare, Media, Real Estate)

The Company: Privately held independent registered investment advisor (RIA) that provides wealth, asset, and business management services to high-net-worth individuals and families. The Company has a variety of unique services not typical of traditional RIAs including access to alternative investments.
Assets Under Management: $300MM+
 
The Financing Situation: The Company was experiencing rapid growth in AUM and planned to go to market to find a strategic partner that could provide the financial and operational support needed to continue to scale the business. Ahead of that transaction, Company management wanted to secure a non-dilutive loan to help finance operational burn and extend runway. The capital would allow the Company to continue to add AUM and give it time to improve enterprise value ahead of a transaction.
 
The Solution: SG was able to get comfortable with the transaction due to the Company’s sticky recurring revenue business model, projected growth in run-rate revenue supported by a strong pipeline, the enterprise value of the Company, and its clear path to profitability. SG was able to close the transaction within 10 days of a signed term sheet.

Product Type: High Net Worth Guarantor

The Company:
A privately-held family investment vehicle.

The Financing Situation:
A high net-worth couple (“the Guarantors”), via the family investment vehicle, were in the later stages of a ground-up construction on a new home. The total cost had eclipsed the initial budget and the additional capital required to complete construction was beyond the loan-to-value comfort level for traditional lenders.

The Solution:
SG was able to underwrite this transaction by taking a holistic approach toward the Guarantors’ personal financial profile, and not restricting leverage solely to the subject property. SG worked quickly to provide a $1.0MM loan structured around the Guarantors’ personal assets and diversified income streams.

This transaction highlights SG’s ability to structure and underwrite 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.

The Company: A newly formed pharmaceutical company setup specifically to acquire, promote, and sell four prescription pharmaceutical products.

The Financing Situation: Before SG became involved, the Company had agreed to purchase four prescription pharmaceutical products using debt financing with an alternative lender. Due to capital raising issues, this lender defaulted on its financing obligation, which eroded the seller’s confidence that the deal would be finalized. When SG was introduced to the Company, the seller was fatigued and highly motivated to consummate the transaction within a two week period or was prepared to walk away. Additionally, the Company’s senior management did not want to risk losing the opportunity to acquire the assets at an attractive purchase price. Given the Company’s pro-forma revenue level was below SG’s investment criteria, SG looked to the personal balance sheet of the founder to structure a transaction and execute within the short timeframe.

The Solution: SG was able to work quickly and creatively to provide a $3.35MM loan structured primarily around the founder’s personal assets (real estate and marketable securities). SG’s speed to close allowed the Company to close the asset purchase and begin rebuilding the revenue base back to historical levels. SG’s facility is viewed by the Company as bridge financing until a broader capital facility can be raised.

This transaction highlights SG’s ability to structure and underwrite guarantor-based loans requiring creativity, flexibility, and speed to close.

The Company:

A single-asset real estate holding company operating as a subsidiary of a broader multi-family / student housing real estate syndication portfolio.

 The Financing Situation:

The Company needed capital quickly to execute on additional portfolio purchases and support working capital at the parent level, where COVID-19 restrictions had temporarily affected occupancy rates at some of the student housing assets.

 The Solution:

Although the parent company and guarantor had a demonstrated history of success, there was no single property that had a value sufficient to provide collateral coverage on the loan. By utilizing a holistic approach of looking at both business and guarantor assets, SG was able to get comfortable with a $6MM facility secured by two properties.

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.

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:
Scott Applegate
President
applegate@capitalplus.com
865.670.2345

The Company: Provider of IT managed services and cloud collaboration solutions.  The Company’s management team owns corporate real estate held in a LLC outside of the Company.

The Financing Situation: The Company was in need of upfront working capital for new contracts, but did not have availability on its bank ABL.  The bank ABL had recently closed its credit facility and was not able to provide additional financing until there was a six month track record of positive financial performance.  Management was intent on executing the new contracts and was willing to provide a second deed of trust on its corporate real estate outside of the business as security for a loan.

The Solution: SGCP quickly underwrote the Company and was able to get comfortable with projection based debt service since there was sufficient equity in the corporate real estate as security.  SGCP provided a $2 million second lien cash flow loan to the Company secured by a second deed of trust on the corporate real estate which enabled the Company to execute on its new contracts and grow the business.

Target Company:
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

Acquiring Company:
An energy-focused holding company that provides financial, technical, operational and strategic management services to its subsidiaries across the globe.

Financing Situation:
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.

The Solution:
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.

The Company: Founder owned staffing company that provides a full suite of employment solutions to IT, life sciences, and business services clients.

Financial Profile: Revenue: $85.0MM | EBITDA: $4.0MM

The Financing Situation: The Company had realized strong revenue growth over the last few years and had a strong pipeline for continued growth. The Company’s bank, Wells Fargo Capital Finance (“Wells Fargo”), was in the process of increasing its revolving LOC facility to scale with business growth and wanted subordinated capital to provide liquidity cushion. Additionally, the principals of the Company were sensitive to dilution and wanted a solution without a warrant / equity requirement.

The Solution: SG Credit Partners was able to get comfortable with the business due to its strong client base consisting of large fortune 1000 clients, historical profitability, strong growth trend, and a robust pipeline of new business. SG Credit Partners provided a non-dilutive $2.0MM loan behind Wells Fargo with structured amortization to provide flexibility around the Company’s projected cash flow. The transaction closed within three weeks and Wells Fargo successfully increased their AR facility.

SG Credit Partners’ second lien (subordinated) 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.

For more information on Wells Fargo Capital Finance, please contact:
Tom Engelberger
Vice President
Thomas.Engelberger@wellsfargo.com
(754) 301-5163
https://wellsfargocapitalfinance.com/

The Company:

Privately owned portfolio of commercial and residential real estate. Total portfolio value: $300 million.

The Financing Situation:

Successful retail entrepreneur diversified his wealth into real estate. While the Company was in the process of selling several large commercial real estate properties in California for liquidity, there was a working capital need to cover operating costs until the transactions closed.

The Solution:

Super G was able to quickly get comfortable with the transaction due to the appraised portfolio value, market feedback, and equity in specific real estate properties. While there was no specific property with equity to support a $3.3 million loan, Super G was able to get comfortable with a pool of properties in a second lien position which traditional real estate and hard money lenders were not comfortable with. Super G provided a $3.3mm second lien term loan with interest-only payments and closed in one week.

This transaction highlights Super G’s expertise in special situations. While the majority of our deals are and will be cash flow based, we will opportunistically 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:

Provider of a SaaS based system that assists K-12 educators and administrators in managing, overseeing and enhancing their students’ engagement in digital learning environments.

The Financing Situation:

Due to the cyclical nature of education-based budgeting and spending in school districts, cash flow in the EdTech space is highly seasonal. Contracts are paid on an annual basis with the vast majority coming in during one quarter of the year. This leads to temporary cash shortfalls which were historically financed primarily through equity from investors. Knowing the company was very close to attaining “escape velocity” and not wanting to further dilute equity, they sought out venture debt as an alternative financing option.

The Solution:

Led by a strong management team, demonstrating solid revenue growth since inception, and having already completed a cost restructuring during 2017, Super G recognized the company was poised for profitability and overall success with the help of some working capital cushion in the near term. Super G was able to work quickly to complete diligence and documentation in order to fund a $1.25MM loan within three weeks and solve the company’s seasonal cash shortfall.