Investment Criteria

SG Credit Partners provides structured term loans tailored to a company’s capital needs. Solutions can come in the form of a senior term loan, second lien term loan, or combination of the two depending on the financing situation.

LOAN SIZES:  $1 - $10 million

SECURITY:

  • Primarily second lien behind senior lender (with occasional carve-out of specific assets)
  • Selective first lien

TERM: 6 – 36 months

AMORTIZATION: Flexible repayment structures around cash flow / liquidity events.

GEOGRAPHY: U.S. Based Businesses

INDUSTRIES: Agnostic

OWNERSHIP: Privately Held, Venture / Sponsor-Backed, Public Companies

USE OF FUNDS: Broad use of funds

UNDERWRITING:

  • See credit profiles below
  • Focus on proforma free cash flow / liquidity for debt service, other assets / enterprise value as secondary source of repayment
cash flow light colored icon

CASH FLOW

Characteristics: Capital need beyond what senior lender is willing to provide and unable to access traditional mezzanine capital and/or have shorter term capital needs requiring speed to close

Revenue: $20 – $100+ million

Proforma EBITDA: $500k – $5+ million

Loan Sizes: $1 – $10 million

SG Credit Partners Structure: Second Lien Term Loan

Situations We’ve Financed:

  •  Seasonality / Cyclicality / Subordinated over-advances / Over-advance paydowns
  • Additional availability / Liquidity for cushion / Stretch pieces (airballs) for borrowing base shortfalls
  • Upfront working capital for contracts / POs
  • Vendor payments
  • Inventory availability
  • Platform and add-on acquisitions
  • Management / shareholder buyouts
  •  LBOs
  • Independent sponsor opportunities
technology light colored icon

TECHNOLOGY

Characteristics: Venture backed, emerging growth technology companies, healthy ratio of invested equity to debt

Revenue: $3 – $10+ million recurring revenue

Proforma EBITDA: Clear path to profitability or sufficient liquidity reserves.

Loan Sizes: $500k – $5 million

SG Credit Partners Structure: Senior Term Loan or Second Lien Term Loan. We will often times start senior secured and transition to second lien as the company grows and can obtain traditional bank financing.

Situations We’ve Financed:

  • Extend runway / liquidity reserves - minimize dilution and retain more of the company
  • Delay equity / M&A event - reach milestones which increase valuation
  • Platform and add-on acquisitions
  • Upfront working capital for contracts/POs
  • Execute sales / growth initiatives
situations light colored icon

SPECIAL SITUATIONS

Characteristics: Unique opportunities with strong backstops, doesn’t fit other lenders’ box, often a true timing need

Revenue: $10 – $100+ million Proforma

Proforma EBITDA: $0 – $5+ million

Loan Sizes: $1 – $10 million

SG Credit Partners Structure: Senior Term Loan, Second Lien Term Loan, or Bifurcated Term Loan (senior tranche + second lien tranche). Flexible security positions around financing situation, cash flow, and collateral available.

Situations We’ve Financed:

  • Asset rich, cash poor entrepreneur in need of liquidity (alternative private banking)
  • Bank-to-ABL / New senior lender
  • Bridge-to-equity
  • Refinancing / Lender paydowns
  • Senior debt for non-bankable business
  • Bank kick-outs / Workouts
  • Litigation settlement
  • Tax liability settlement
  • Turnarounds
SGCP Logo

Copyright © 2019 SGCP. All rights reserved.

California loans are made pursuant to SG Credit Partners, Inc.'s California Department of Corporations Finance Lender License No. 60DBO-87290. Credit approval is subject to SG Credit Partners, Inc.'s credit standards, and actual terms (including actual loan amount) may vary by applicant. SG Credit Partners, Inc. requires certain supporting documentation with each new application. Complete disclosures of APR, fees, and payment terms are provided with each loan and are available from SG Credit Partners, Inc. at 23 Corporate Plaza, Suite 100, Newport Beach CA 92660, telephone 1-800-631-2423.