Growing rapidly but don’t want to sell equity? Commercial credit may be the solution.
Commercial Credit is a great alternative for companies seeking to finance growth without selling equity.
Commercial credit permits a qualifying company to obtain senior or subordinated loans in order to expand or restructure operations, enter new markets, expand product or service offerings, or finance a significant acquisition without a change of control of the business. Qualifications vary dramatically depending upon the type of financing sought, as well as the particular posture and metrics of the borrower.
While more expensive than “money center bank” loans, commercial credit offered to growing and emerging growth companies provides opportunities for substantial growth without substantial dilution in equity ownership.
Commercial Credit takes many forms, including:
Term loans
Cash Flow Loans
Equipment Financing
Factoring
Accounts Receivable Financing
Mezzanine Financing
Revenue-Based Financing
Inventory & Purchase Order Financing
HIGHLIGHTED TRANSACTION
Credit facility for applya Occupational Strategies
When ClearThink began its relationship with applya, it became clear that a substantial impediment to applya’s growth was the highly restrictive credit facility which applya had with a local lender. This facility was “covenant heavy”, which meant that applya was required to comply no less than monthly with a large number of highly restrictive covenants, and was required to document that compliance continually, which was a financial burden and exacted a human cost from applya. In addition, the introduction of new clients required extensive lender review, which resulted in the loss of numerous high margin business opportunities which were awarded, but then lost following extensive delays by the lender.
ClearThink sought a solution in the form of an alternative commercial lender, which provided funding with limited covenant coverage, commercially reasonable terms, and an understanding of the high growth environment in which applya then found itself. ClearThink delivered a credit facility from a family office experienced in the finance of high growth companies, flexible and reasonable in terms, substantially increased in amount, and reasonable in covenant coverage. To date, the relationship between applya and the lender has enabled applya to demonstrate substantial growth, greatly reduce compliance costs, and streamline client onboarding.
