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Deal Spotlight!
FINANCED CASE STUDIES
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EXPANSION-GROWTH FINANCING
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This company is an industrial bag manufacturer.
The company has operated for about 20 years
and in 1996 formed a company to manufacture
and supply its own raw materials. This strategy
vertically integrated both the supply and
manufacturing. The year 2000-2001 was a year
of implementing manufacturing improvements.
The 2002 results showed significant improvement
in cost structure and profitability. The
2003 and future long term prospects for the
company looked good with new contracts that
would see sales continue to grow. However,
the company had significantly outgrown its
current credit facility of $1,500 MM. In
addition, the company needed to expand its
production capacity to meet future sales
commitments. Their current lender declined
to provide any additional financing.
The proposed program involved a new lenders with a new comprehensive
financing program to finance this growth
and expansion.
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PROGRAM
Purpose
Expansion Capital $ 700,000
Equipment
600,000
AR and Inventory 1,800,000
________
$ 3,100,000
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Source
Operating Line $ 1,800,000
WC Term Loan
700,000
Equipment lease
500,000
Down payment
100,000
________
$ 3,100,000
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TERMS & CONDITIONS
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Operating Line of Credit facility charged
a rate of Prime plus 1% secured by accounts
receivable and inventory.
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Working Capital term loan over 5 years fixed
rate at 9.3% secured by capital assets.
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Equipment lease over 7 year term charged
at a rate 7.95%.
FEATURE & BENEFITS
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over 80% financing on equipment.
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acquired much needed expansion capital.
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no personal guarantees required on any new
financing.
OTHER
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Clients own bank declined financing request.
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NetFinance placed and sourced all the funding for
the client.
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