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Jeffrey Sweeney is an investment banker with years of experience in direct lending and corporate finance for small- to middle-market companies. He is the CEO and Managing Director of US Capital Partners, an innovator in small- to middle-market business lending. US Capital Partners has been providing prompt, innovative, and reliable financing solutions across the United States and abroad for more than a decade.

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Tuesday
Jan202015

Well-Structured, Custom Financial Solutions for Small and Medium-Sized Businesses (PART III OF III)

Ten ways US Capital Partners overcomes common financing challenges for its clients and engineers prompt, innovative, and reliable finance solutions outside the “bankable box.”

Part III, the last of this series, explores four additional special situations in which US Capital Partners is able to provide innovative, market-leading financing solutions for smaller businesses.

7. Constraints from an Existing Financing Structure

Small and lower middle market businesses sometimes find themselves restricted by stringent loan covenants or the ill-conceived terms of an early venture capital tranche. Last year, a diversified business holding company needed additional debt financing. However, the holding company’s operating subsidiaries already had maximum leverage, and any additional leverage in those businesses would trip existing loan covenants. Using the holding company’s stock as collateral for added leverage, US Capital Partners was able to provide $10 million in further term loan financing for the holding company, while the company’s existing operating subsidiaries remained fully in compliance with their respective loan terms.

8. Absence of a Personal Guarantee

Many traditional banks are unable to provide a small-business loan without the support of a personal guarantee. Last quarter, 39% of smaller private businesses with financing from an outside source reported having business loans that required a personal guarantee. By contrast, US Capital Partners regularly designs and provides debt facilities for smaller businesses that do not require any personal guarantees.

9. Distress/Workout Situations

Following weak harvest years, a California-based international produce supplier suffered a dip in earnings and cash flow. This coincided with the company’s bank becoming severely weakened during the economic downturn. Faced with liquidity issues, the bank was no longer able to provide the seasonal “over-advance” it had made available for the past ten years. Now unable to pay its vendors, the company was under serious financial pressure, which triggered a bank workout. US Capital Partners quickly engineered a workout plan for the company, negotiated a successful exit from the bank, and helped the company secure $7 million in additional financing.

10. When Time Is of the Essence

If a business finds itself short of working capital, is pursuing an acquisition, or is in distress or workout, it will usually need financing without any delay. US Capital Partners understands the need to close quickly, and has an expedited transaction process. Recently, for example, US Capital Partners provided a $500,000 bridge loan for Chellino Crane, Inc., an Illinois-based crane rental and operating business, in less than five days. The bridge financing allowed the business to purchase additional equipment promptly, to execute on new contracts.

US Capital Partners looks at every aspect of a business to provide well-structured, custom financial solutions for its clients. Often, it is able to increase availability through the discovery of credit enhancers and ways to mitigate credit risks. The firm’s non-formulaic approach and in-depth analysis allow it to provide the best financing available, not only for companies in excellent financial condition, but also for businesses that may have been refused credit by traditional lenders.

Tuesday
Jan132015

Well-Structured, Custom Financial Solutions for Small and Medium-Sized Businesses (PART II OF III)

Ten ways US Capital Partners overcomes common financing challenges for its clients and engineers prompt, innovative, and reliable finance solutions outside the “bankable box.”

As illustrated last week, US Capital Partners structures and provides custom, market-leading financing solutions for the following common special situations: (1) complex company structures, (2) businesses outside the United States, and (3) concentration risk and foreign customer risk.

Part II explores three further special situations that render business financing challenging for most traditional lenders, by increasing risk and complexity. Examining transactions on a case-by-case basis, US Capital Partners offers intelligently structured, custom financial solutions for smaller businesses, especially in these situations.

4. Ratio of Inventory to Accounts Receivable “Upside Down”

With sales ready to escalate following TV celebrity endorsements, a developer of personal massagers required additional working capital to support its inventory needs. The challenge was that the company’s ratio of inventory to accounts receivable was “upside down.” Companies with significantly higher inventory than accounts receivable are generally declined by traditional lenders. In this case, US Capital Partners provided an accounts receivable line of credit scalable to $5 million for the firm, together with a $1 million inventory line of credit.

5. Specialized Enterprises and Criticized Industries

AdJuggler, Inc., a software-as-a-service company, required flexible and scalable financing to support its ongoing growth. Many traditional bank lenders lack the expertise and experience to fund certain specialized enterprises, such as online advertising and software-as-a-service companies. They are therefore able to offer only limited financing flexibility. However, US Capital Partners was able to provide a flexible $1.25 million credit facility for this enterprise.

US Capital Partners regularly provides best-in-class funding even for businesses in industries that are generally difficult to finance. For instance, US Capital Partners provided $2.8 million in refinancing for SpecPrint, a family-run custom printing business. SpecPrint’s lender was looking to exit because the business had suffered declining sales and was operating in a criticized industry, printing.

6. Pre-Revenue Business; Lack of Historical Performance

Electronic Polymers Newco, Inc. had pioneered a new technology at a lower cost and footprint than competing products. The time had come for the company to move from an R&D facility to a manufacturing facility, and it approached US Capital Partners for assistance. Although Electronic Polymers Newco was a pre-revenue business and lacked cash-flow and debt service, US Capital Partners was able to provide a $700,000 machinery and equipment term loan to support the next stage of the company’s growth.

Many businesses are in their early stages, and may not have many years of historical performance. Traditional banks may therefore be hesitant to lend to them. However, US Capital Partners offers cash-flow term loans and other financing options to such businesses, even if they have less than $5 million in trailing EBITDA—which used to be the threshold for such loans.

Continued next week…

Tuesday
Jan062015

Well-Structured, Custom Financial Solutions for Small and Medium-Sized Businesses (PART I OF III) 

Ten ways US Capital Partners overcomes common financing challenges for its clients and engineers prompt, innovative, and reliable finance solutions outside the “bankable box.”

Small-business lending by traditional banks has been slow to recover. According to a recent survey, only half of smaller private businesses that attempted to secure a bank loan in the last three months were successful. Likewise, just 34% of applications for an asset-based loan succeeded. Many smaller businesses don’t even apply for financing because they believe they will be declined. This is often because of special circumstances that render these businesses challenging to finance.

US Capital Partners examines transactions on a case-by-case basis. Its financing technicians have years of experience, allowing them to structure custom finance solutions for smaller businesses quickly and efficiently. Below are examples of the firm’s ability to provide funding in ten common special situations.

1. Complex Company Structures

Financing a business comprised of numerous subsidiaries and related entities can be challenging. Recently, Bushman Organic Farms, Inc., a manufacturer and distributor of organic soy products, needed a more suitable financing structure and additional working capital to purchase inventory. This was no easy feat because of the structure of the business, which included 27 other subsidiary and related companies. Nonetheless, US Capital Partners was able to provide a $5 million accounts receivable and inventory line of credit for this business.

2. Businesses Outside the United States

Some US businesses have subsidiaries abroad, for which they may struggle to find suitable funding. More commonly, they simply have trade receivables and other assets abroad. In some cases, the parent company itself may be situated outside the US, with operations or subsidiaries located within the US. In all such cases, US Capital Partners can structure and provide optimal, custom financing. Recently, for instance, US Capital Partners provided a $2.5 million accounts receivable line of credit for a digital media business located in Australia, and also a $500,000 growth-capital term loan for Tora Ventures, headquartered in Alberta, Canada.

3. Concentration Risk and Foreign Customer Risk

Last year, Hans Drake International Corp., a leading producer and distributor of nutritional products, needed scalable financing to increase its inventory and fulfill new orders. But with hundred percent of the firm’s receivables with a single customer in Australia, this represented a challenge for most traditional lenders. Nonetheless, US Capital Partners was able to provide a $1.5 million accounts receivable line of credit scalable to $5 million for the business, despite concentration risk combined with foreign customer risk. 

Tuesday
Dec162014

US Capital Partners Provides $500,000 Bridge Loan for Chellino Crane, Inc.

US Capital Partners Inc. has put in place bridge financing in less than five days to support the growth of an Illinois-based crane rental and operating business servicing the energy industry.

SAN FRANCISCO, DECEMBER 2014 – US Capital Partners Inc. has provided a $500,000 bridge loan for Chellino Crane, Inc. (“Chellino Crane”), headquartered in Joliet, IL. US Capital Partners is a private investment bank that makes direct debt investments, participates in debt facilities, and arranges equity placements for small to lower middle market companies.

Currently at an inflection point in its growth, Chellino Crane has a strong pipeline of new projects and opportunities. The bridge financing provided by US Capital Partners will be used to acquire additional equipment to meet the needs of customers and execute on these opportunities.

“We are delighted to have provided a $500,000 term loan for this Illinois-based crane rental and operating firm,” said Jeffrey Sweeney, CEO and Managing Director at US Capital Partners. “US Capital Partners has a strong track-record in providing best-in-class financing for small to lower middle market businesses across the United States, with a special focus on speed, structure, and efficiency of execution. We were able to provide this bridge financing for Chellino Crane swiftly, so that the business could purchase additional equipment as quickly as possible to execute on new contracts.”

About Chellino Crane, Inc.

Chellino Crane is a crane rental and operating business that services the oil refinery, chemical plant, power plant, and wind farm industries. Headquartered in Joliet, IL and in business for over forty years, the firm provides rental equipment such as hydraulic truck cranes and crawler cranes, together with supporting equipment and experts in the field to support, maintain, and operate its cranes. Chellino Crane is known both for the quality of its equipment and the experience of its operators and field supervisors.

About US Capital Partners Inc.

Since 1998, US Capital Partners (www.uscapitalpartners.net) has been providing prompt, innovative, and reliable financing solutions including lending, equity financing, and debt re-structuring to businesses across the United States and abroad. US Capital Partners is a private investment bank, direct lender, co-lender, and lead financial arranger that specializes in asset-based debt for small to middle market private and public companies. The company’s innovative approach allows it to provide the best financing available, not only for companies in excellent financial condition, but also for companies that may have been refused credit by traditional lenders.

To learn more about how your business can secure the funding it needs, email Jeffrey Sweeney, CEO and Managing Director, at jsweeney@uscapitalpartners.net or call (415) 889-1010.

Thursday
Dec112014

Marc Berman Joins US Capital Partners as Senior Vice President

Leading private investment bank for the lower middle market appoints Senior Vice President to its expanding mergers and acquisitions division.

SAN FRANCISCO, DECEMBER 2014 – US Capital Partners Inc. announced today that Marc Berman has joined its expanding Investment Banking group as Senior Vice President, Mergers & Acquisitions. Headquartered in San Francisco, US Capital Partners is a private investment bank that specializes in well-structured, custom debt and equity solutions for the lower middle market.

Prior to joining US Capital Partners, Mr. Berman was a principal at Berman Capital, LLC, a registered broker-dealer and FINRA/SIPC member investment bank, which he founded in 1971. In his investment banking career Marc has completed over a hundred mid-market merger and acquisition transactions, working primarily with private, entrepreneur-driven companies.

The Investment Banking group at US Capital Partners focuses on merger and acquisition advisory services for buyers and sellers in the emerging middle-market arena ($5 million to $200 million in enterprise value), private equity sourcing,  growth capital, and private placements.

“I am extremely pleased to welcome Marc to the firm,” said Jeffrey Sweeney, CEO and Managing Director at US Capital Partners. “Marc has joined the firm’s Investment Banking group following another year of increased demand from lower middle market businesses for our innovative and customized financing solutions and best-in-class advisory services. Marc brings many years of experience in investment banking and M&A to US Capital Partners, helping to position the firm for further significant growth in 2015.”

Commenting on his new role, Mr. Berman said, “I am delighted to join US Capital Partners and its highly effective team of investment professionals. Throughout my career in investment banking, I have worked primarily with private, entrepreneur-driven companies. US Capital Partners, with its strong focus on the small and lower middle market, is a perfect fit, and I look forward to supporting the firm’s continued expansion.”

Mr. Berman has served as an officer, director, and shareholder of Berman Capital, Erie Manufacturing, California Pretzel, Granny Goose Foods, Honeycomb Structural Products, Pentron Industries, and Rotonics Manufacturing.

About US Capital Partners Inc.

Since 1998, US Capital Partners (www.uscapitalpartners.net) has been providing prompt, innovative, and reliable financing solutions including lending, equity financing, and debt re-structuring to businesses across the United States and abroad. US Capital Partners is a private investment bank, direct lender, co-lender, and lead financial arranger that specializes in asset-based debt for small to middle market private and public companies. The company’s innovative approach allows it to provide the best financing available, not only for companies in excellent financial condition, but also for companies that may have been refused credit by traditional lenders.

To learn more about how your business can secure the funding it needs, email Jeffrey Sweeney, CEO and Managing Director, at jsweeney@uscapitalpartners.net or call (415) 889-1010.