USCP Advises on Financial Restructuring and Debt Relief
US Capital Partners recently provided advisory and financial restructuring services to a distressed regional auto parts distributor. They came to us due to problems in 2007–09 with declining sales. US Capital Partners looked at the problem and diagnosed the solution - a combination of lending and advisory help.
If a business is under pressure financially, the value of a having qualified financing specialists on your side is priceless.
At US Capital Partners, LLC (“USCP”), we not only provide direct lending but we also offer a service that businesses may not realize they need - specialist advisory and financial restructuring services. Our ability to assess complex or special situations quickly and provide solutions outside the conventional box has made us one of the most innovative small to middle market investment banks and lenders in the country.
The Financial Restructuring and Debt Relief Auto Parts Distributor Case Study:
#1.) The Problem - Like many smaller companies, this client started running into problems in 2007–09 with declining sales. The company had a line of credit with a regional bank, and unfortunately, it was unable to recover profitability quickly enough to maintain this lending relationship. Its losses and decline in enterprise value led to a covenant breach and a minor, technical breach on its borrowing base certificate. The bank lost its patience and put the company in forbearance.
2.) The Solution - The auto parts distributor company turned to USCP for help. The client's relationships with its bank and primary supplier, a major national auto parts manufacturer, were by this stage seriously weakened. The company was in critical and imminent danger: its creditors were about to come in and liquidate the business.
USCP included 6-month advisory in addition to the restructuing services - we negotiated with the supplier for a more favorable purchase price, and with the bank for a discount on the debt.
USCP’s advisory efforts resulted in an exit through sale without the need for the principals to file personal bankruptcy. Through USCP’s intervention, some debt was forgiven, the business was sold, and the owners were able to retain their personal and commercial real estate assets.
As this case study illustrates, it’s important to bring in lenders and financing specialists sooner rather than later.
Even in a late and seemingly intractable situation, USCP can be instrumental in engineering a pathway that is least damaging to the client and its stakeholders.
To download a complete case study pdf, visit www.uscapitalpartners.net.
About US Capital Partners - Direct Lending and Advisory
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 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 them 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.
If you would like to know more about how we can support you with financing, visit www.uscapitalpartners.net or call (415) 889-1010.