Search

Featured Small Business Lending Article

Small Business Lending
ABOUT

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 chairman and CEO 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.

Subscribe to Blog
Navigation
Friday
Aug272010

Alternative Financing Case Study: How Imagenetix Secured $1.5 Million to Eliminate Working Capital Constraints and Support Expansion

I recently blogged about our role at US Capital Partners as the Sole Arranger of $1.5 Million Credit Facility for Imagenetix, Inc. 

Imagenetix is a California-based public company traded on NASDAQ (Symbol: IAGX). Headquartered in San Diego, the company is a growing innovator of scientifically tested, proprietary bioceutical products. It develops, formulates and markets natural-based, over-the-counter skincare products, topical creams, and nutritional supplements.

Imagenetix was being hindered by working capital constraints. To support its ongoing expansion, the company approached US Capital Partners for a working capital line of credit. The challenge for us was to arrange suitable financing for Imagenetix despite the company’s AR and inventory collateral possessing some retail credit risk.

We were able to successfully arrange a $1.5 million senior secured credit facility for Imagenetix. This included an AR and inventory line of credit, which maximized Imagenetix’s borrowing eligibility and provided the company with the liquidity it needed.  As an alternative small business lender, we have particular expertise in underwriting AR and inventory collateral that possesses retail credit risk.

Our innovative approach to small business lending allows us to provide the best financing solutions available, not only for companies in excellent financial condition, but also for companies who may have been refused credit by traditional lenders. As a private investment bank, direct lender, co-lender, and lead financial arranger, we specialize in securing financing for smaller companies that is both intelligently structured and affordable. We provide alternative financing for working and growth capital for small- to middle-market private and public companies. 

We are glad to have the opportunity to help Imagenetix reach their financial goals.

Visit our web site to view additional US Capital Partners transactions.

Since 1998, US Capital Partners has been providing prompt, innovative, and reliable financing solutions including lending, corporate financing, and debt re-structuring to businesses across the United States and abroad. We will give your business the attention it deserves and find the most suitable product for you. We offer true one-stop financing and will work in partnership with you throughout the lending process. If you would like to know more about how your business can secure the funding it needs, visit http://www.uscapitalpartners.net/ or call (415) 882-7160.

 

Monday
Aug162010

Financial Advisory Case Study: How Consensus Orthopedics Secured New Financing to Eliminate Working Capital Constraints and Fuel Growth

As a leader in the alternative lending space, we offer specialist financial advisory and restructuring services to help businesses secure the best possible financing solution. Sometimes the pathway to refinancing is clear; at other times it is less so.

At US Capital Partners, we not only provide funding as a direct lender, co-lender, and lead financial arranger, but also offer specialist advisory and financial restructuring services. I recently blogged about how USCP served as co-lender and sole arranger of $3.5 million credit facility for Consensus Orthopedics. 

Our ability to assess complex or special situations quickly and provide solutions outside the bankable box has made us one of the most innovative small to middle-market investment banks in the country. We've put together the financial advisory case study below to illustrate how we were able to work with Consensus as an advisor, direct lender, co-lender, and sole arranger to secure financing to eliminate working capital constraints and fuel growth. 

About Consensus Orthopedics

Consensus Orthopedics, Inc. ("Consensus") is a US-based medical device manufacturer with global distribution. Founded in 1992 and headquartered in El Dorado Hills, CA, the company designs, manufactures, markets, and sells orthopedic implant devices, such as artificial knee and hip joints, worldwide. Today, it offers a full line of quality hip and knee products designed by its team of engineering experts in conjunction with input from leading orthopedic surgeons in the United States, Europe, Australia, and the Middle East.

The Problem

Like many companies, Consensus's growth was being slowed down by insufficient working capital. The company also wanted to finance the acquisition of new equipment. The problem was that Consensus had not yet become profitable, which rendered additional financing unattractive to its current bank, a bigger "marquee lender."

Consensus had no line of credit on its inventory assets with its bank, and its accounts receivable revolving line of credit was at less than 50% loan to value. Also, the company had no line of credit on its foreign receivables. Marquee lenders or commercial banks are often unable to offer their clients suitable alternatives. Due to regulatory issues, they insist that their clients fit into their fixed criteria, or "bankable box."

As a result, clients are frequently locked into an inappropriate structure. Like many businesses, Consensus needed an affordable financing solution that provided more working capital, tailored to its specific needs. In particular, Consensus wanted to avoid raising additional equity at low valuations while the business was still pre-profitable, as this would significantly dilute its current shareholders. Consensus was therefore looking primarily for debt financing rather than equity financing, and the company approached US Capital Partners for advice and assistance.

The Optimal Financing Solution

At US Capital Partners, we have a wide financial product offering. This allows us to create solutions tailored to the client's needs. We started by looking at Consensus's debt financing needs very carefully. By examining every aspect of a business, US Capital Partners is able to offer management a choice of the best available pathways to optimal financing.

In the first year, US Capital Partners arranged alternative financing on Consensus's receivables, and included its foreign receivables. US Capital Partners also provided Consensus with term-loan growth capital, as a direct lender. It provided this through the Breakwater Structured Growth Opportunities Fund, a $100 million open-ended private investment partnership focused primarily on debt financing for smaller growth-oriented companies.

As US Capital Partner's financial modeling showed, this injection of fresh capital allowed Consensus to be profitable for the first time since its inception. This in turn allowed US Capital Partners to secure additional inventory financing for Consensus—at the height of the credit crisis. US Capital Partners also strategically advised Consensus on a $2 million equity raise, which was effected with minimal dilution. By this stage, the company had good debt financing in place, significant and scalable increases in working capital, and was showing healthy profits. Consensus now fitted into the "bankable box," and was well positioned to return to a commercial bank.

In early 2010, US Capital Partners therefore moved the company from a strict asset-based lender to a commercial bank, by introducing Consensus to Bridge Bank. This relationship with a commercial bank now provided Consensus with still more financing but at a greatly reduced cost. The additional savings in interest costs over the asset-based line of credit replaced by Bridge Bank allowed US Capital Partners to provide Consensus with a further tranche of term-loan growth capital, through the Breakwater Structured Growth Opportunities Fund.

Summary

Over the past four years, US Capital Partners has worked with Consensus as an advisor, direct lender, co-lender, and sole arranger to secure $7.5 million in additional financing for the company. Consensus in now optimally financed, turning a healthy profit, and expanding its domestic and international footprint. US Capital Partners is now in the process of arranging working capital financing for Consensus's Turkish subsidiary, which the company has been unable to secure locally with Turkish banks.

"We have continued to turn to US Capital Partners to assist us in financing our working capital needs over the past four years due to their breadth of experience in asset-based lending," said Colleen Gray, CEO of Consensus. "US Capital Partners has successfully structured and financed credit facilities on our behalf that increase our capital availability while decreasing our cost of capital."

US Capital Partners fully understands the financing needs of its commercial clients. It also fully understands the various specific criteria of individual marquee lenders and alternative lenders for small businesses. This detailed, specialized knowledge of the marketplace allows US Capital Partners to engineer affordable financing for its clients quickly and efficiently.

Lee Shodiss, Senior Vice President and Manager of Bridge Bank's Capital Finance Division (BCFG), affirmed this. "Bridge Bank is committed to working with great partners like US Capital Partners who bring us into quality relationships such as Consensus," he said. "US Capital Partners did an excellent job understanding our underwriting criteria and presenting the deal in a professional and cooperative manner.

US Capital Partners' initial underwriting and efficient process was critical in getting this deal closed." Consensus has been an advisory client of US Capital Partners for the past four years. It has recently signed up for advisory services for a further three years.

To learn more about how USCP helps businesses secure optimal financing solutions, see our additional alternative lending case studies.

About US Capital Partners, Inc.

Since 1998, US Capital Partners has been providing prompt, innovative, and reliable financing solutions including lending, corporate financing, advisory, and debt re-structuring to businesses across the United States and abroad. The company's innovative approach allows them to provide the best financing available, not only for companies in excellent financial condition, but also for companies who may have been refused credit by traditional lenders.

If you would like to know more about how your business can secure the funding it needs, visit http://www.uscapitalpartners.net or call (415) 882-7160.

Wednesday
Aug112010

US Capital Partners, LLC Serves as Sole Arranger of $1.5 Million Credit Facility for Imagenetix, Inc. 

At US Capital Partners, we specialize in providing investment banking and lending solutions for small- to middle-market companies. 

Below is an announcement of one of our recent transactions.

You can also visit our web site to view additional US Capital Partners transactions. 

Check out our deal announcement in the ABF Journal.

__________________________________________

We recently arranged a $1.5 million credit facility for Imagenetix, Inc. (“Imagenetix”), headquartered in San Diego, CA. The new senior secured credit facility served to eliminate Imagenetix’s working capital constraints and facilitate the company’s ongoing growth. A public company traded on NASDAQ (Symbol: IAGX), Imagenetix is an innovator of scientifically tested and proprietary bioceutical products. The company develops, formulates and markets natural-based, over-the-counter skincare products, topical creams, and nutritional supplements. Its main branded products are Celadrin®, a line of products that promote joint health, and BioGuard, a probiotic protection for the ear, nose, and throat.

Imagenetix is pioneering a new niche for natural-based bioceutical companies. To support Imagenetix’s rapid expansion, we successfully arranged an AR and inventory line of credit for the company, providing it with the liquidity it needed.

“We approached USCP for a working capital line of credit to support our ongoing growth,” says Lowell Giffhorn, CFO of Imagenetix. “USCP has successfully structured and arranged financing for us that maximizes our borrowing eligibility. We are very pleased with the result and process.”

We are delighted to have arranged this financing facility for Imagenetix. At USCP, we specialize in securing financing for smaller businesses that is both intelligently structured and affordable. We have particular expertise in underwriting AR and inventory collateral that possesses retail credit risk.

About US Capital Partners, LLC

Since 1998, US Capital Partners has been providing prompt, innovative, and reliable financing solutions including lending, corporate financing, and debt re-structuring to businesses across the United States and abroad. US Capital is a 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 them to provide the best financing available, not only for companies in excellent financial condition, but also for companies who may have been refused credit by traditional lenders. If you would like to know more about how your business can secure the funding it needs, visit http://www.uscapitalpartners.net/ or call (415) 882-7160.

Tuesday
Aug032010

What Small Businesses Need to Know When Seeking Alternative Financing from Private Lenders 

A recent article in the LA Times highlights business owners who have been turned down by banks and are now taking out 'hard money' loans, often at high interest rates. In the article Desperate for capital, small businesses turn to private lenders, Sharon Berstein examines how private lenders are able to support small businesses at a time when credit is scarce, providing loans that help borrowers fix their credit scores or buy equipment to expand. However, she also notes that the extra cash can come at great cost.

While I'm glad to see an article like this, there are a few things that I would love to see explored further. I have no intention on coming to the aid of the banks that are not making loans to credit worthy borrowers because of their structural and financial problems. However, we do not want to deride the alternative lenders for providing capital when needed.

What we need is a more efficient market where businesses are confident they are paying appropriate interest rates commensurate with their current risk profile. This is simply not happening and creating a dislocation in borrowing expectations. Here is where qualified advisors come into play, especially when they are also lenders and really understand credit risk profiling and are able to provide the appropriate capital or a lender for that risk profile. Sometimes part of the loan can be with the bank for low cost and the riskier portion is with a higher priced alternative lender.

With a skilled financial advisor, a business owner can be confident he has obtained the best financing terms even for an interim period, until he is able to go back into the low cost, low risk bank portfolio. So we really need to understand what banks are required to look for and set our expectations to reality and seek alternative lenders when appropriate and at market prices.

How can businesses make smart decisions about recapitalization and financial restructuring to continue securing working capital? If your business currently doesn't fit a bank's lending risk profile, you can learn more about how to secure Alternative Financing and Small Business Loans for Working and Growth Capital.

Since 1998, US Capital Partners has been providing prompt, innovative, and reliable financing solutions including lending, corporate financing, and debt re-structuring to businesses across the United States and abroad. We will give your business the attention it deserves and find the most suitable product for you. We offer true one-stop financing and will work in partnership with you throughout the lending process. If you would like to know more about how your business can secure the funding it needs, visit US Capital Partners, Inc. at http://www.uscapitalpartners.net/ or call (415) 882-7160.

Monday
Aug022010

Small Business Financing News: Much-Needed Financial Advisory Services Helps Companies Obtain Alternative Financing Solutions

Qualifying for traditional bank or cash-flow loans remains a challenge for many businesses in the current economic climate. Specialist financial advisory services offered by private banks like US Capital Partners, can help these companies obtain optimal financing solutions tailored to the their specific needs.

Our financial advisory services are ideal for under-capitalized companies and businesses facing difficult situations including recent operating losses, poor recent economic performance, or challenges with uncooperative lenders.  Many small companies simply do not know what they don't know, which is why we began to offer advisory. With our specialized advisory services, clients benefit from an independent opinion of their financial condition as well as a professional estimation from a lender’s perspective of the value of their collateral and the amount of refinancing that would be available to them.

Small businesses that are struggling to secure financing for working and growth capital in the ongoing financial crisis may find themselves in complex situations that require specialist advisory. 

For instance, UCSP can advise on how to deal with a hostile bank, how to resolve lender issues, or how to refinance in special situations.  Our specialized team of experts also provides much-needed advisory services designed to provide reliable financing to businesses that do not otherwise qualify for traditional bank or cash-flow loans. By examining every aspect of a business, USCP is able to offer management a choice of the best available pathways to optimal financing.

We’ve found that corporate refinancing and restructuring can be stressful for all parties involved – and having strategic financial advisory services from an experienced third party can help minimize that stress while also preserving your assets. And while it’s never too late to get help assessing your complex or special situation, the sooner you do, the sooner you can get the expert advisory you need to engineer affordable financing for your business.

Check out our latest Advisory Case Study.

Since 1998, US Capital Partners has been providing prompt, innovative, and reliable financing solutions including lending, corporate financing, and debt re-structuring to businesses across the United States and abroad. US Capital 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.

Our innovative approach allows us to provide the best financing available, not only for companies in excellent financial condition, but also for companies who may have been refused credit by traditional lenders. If you would like to know more about how your business can secure the funding it needs, visit http://www.uscapitalpartners.net/ or call (415) 882-7160.