RECENTLY FUNDED | $3.5MM Asset-Based Line of Credit for a Technology Driven Staffing Operations Business
LOAN CASE STUDY: Speritas Capital Partners advised the co-founders of a Texas-based technology-driven staffing operations start-up, as the co-founders sought financing to fuel growth using an asset-backed line of credit.
THE SITUATION: A privately held 1 year old start-up was in need of funding to support the growth in clients adopting their technology platform.
The co-founders had been self-funding the business but required funding to hire staff to support new clients and to finance payroll payments on behalf of their clients.
Based in Texas, the company provides a unique tech platform tailored to the recruiting industry, encompassing back office processing, operational support and financial services.
The company’s growth was the result of their focus on an end-to-end platform, exceptional customer service and client retention.
Speritas Capital was able to craft an engaging story of the co-founders’ expertise and, despite the early stage of the company, was able to engage the interest of several bank lenders.
Loan Challenges
In this case, the primary funding challenge was the start-up status of the business. Start-ups can be challenging to fund because there is less of a financial track record and in some cases no corporate tax returns.
To find a lender, Speritas Capital first dug deep into the operational aspects of the business and the controls in place to ensure the accounts receivable collateral was high quality.
Once we understood how the company worked ‘under the hood’ we were able to tell a convincing story about the core strengths of the business, its assets and the founders.
Understanding the company operationally, packaging that info, and identifying the right lender were hurdles that were overcome relatively quickly.
Structural Challenges
This particular type of business has an inherently challenging business model. Recruiters stand between clients and contractors and require a technology platform and financing to control and expand their business. Our client is the fourth entity in each transaction. Assessing lien perfection, risk management and scalability are structural challenges in this type of deal.
Speritas Capital’s Role
The co-founders of the company were savvy serial entrepreneurs who found Speritas Capital online and liked what they saw on our website.
Their professionalism and ability to provide the necessary documentation and financials quickly enabled Speritas Capital to move at speed. We assessed the possibility of a bank loan and decided that there could be strong interest given the quality of assets, the technology and the management team.
With the company being a start-up, we knew we needed a lender that would appreciate the deep operational and start-up experience that the co-founders brought to the table.
Speritas Capital added value throughout the process by carefully targeting and approaching bank lenders, quickly identifying the best fit, and establishing a secure deal process.
As usual, our ultimate success hinged on our deep lender knowledge and relationships.
ABL questions? Call or text 203-247-4358, send an email, or schedule a call now with Speritas Capital CEO, Jeff Bardos.
Our Bank Partner
Jeff quickly leveraged a long-term relationship with a bank ABL lender who thinks creatively about risk. The lender is also a fellow member of the Connecticut Chapter of the Turnaround Management Association. Jeff and the lender worked quickly to develop a revolving credit structure which met the client’s initial need and allowed for future growth. And all at a competitive price.
About this Asset Backed Loan
There were two parts to this transaction:
Financing additional staff hires.
Providing asset backed financing for a payment gap between clients.
LOAN DETAILS
Loan Type: Asset-Based Line of Credit
Lender: Traditional Bank
Loan Amount: $3.5MM
Rate: Prime +3
Term: 3 Years
Closed in 90 days
“Jeff responded quickly and was able to identify the best loan structure and a lender who would take a serious look at a start-up. Jeff was able to arrange a revolving line with a flexible lender and one we can grow with. Thank you for your hard work!”
Learn More About the strategic use of Asset Backed Loans
Conclusion – Post Finance Update
With the closing of this $3.5MM ABL line the company is well positioned to support their high growth with a lending partner who appreciates their business acumen & fundamentals.
While finding creative nonbank options is often what Speritas Capital is called upon to do - we always assess the viability of working with a bank lender first.
In this case we found the perfect bank funding partner through our banking relationships.
Speritas Capital is proud to be a critical part of the team that helped ensure the continued growth of this start-up.
Are you looking for a strategic partner to advise you on your next ABL financing challenge?
The Speritas Capital team is always happy to hear your story, learn more about your financing needs and answer your questions. We bring our 30+ years of banking experience and our transparent, strategic approach to every client and every deal, both large and small.
And we never take up front fees.
CONTACT INFO
Jeffrey Bardos
CEO Speritas Capital Partners
Call/text Jeff at 203-247-4358
Email Jeff with your ABL financing questions
Schedule a call with Jeff using our online scheduling tool.
More about Jeff
More Recently Funded Deals
Suggested ABL Reading - Grab a beverage & take a seat by the fire or on the deck!
PRESS RELEASE
Speritas Capital Partners Advises on $18 Million Closed ABL Deal
GREENWICH, CT — DECEMBER 16, 2024
Speritas Capital Partners today announced the closing of an $18 million asset-based revolving line of credit for a manufacturer of proprietary storage products.
Speritas Capital was brought in by the client to assess financing options to pay off their current lender and to support substantial growth. The new revolving facility helps position this family-owned business for future expansion.
“Our ability to provide financing options tailored to the company’s specific financial condition and financing needs made a big difference,” says Speritas Capital’s CEO, Jeffrey Bardos. “We worked closely with the executive team to develop a compelling story for potential lenders. COVID and post-COVID logistics issues impacted the company’s financial performance and restricted the previous lender’s interest in supporting growth. Speritas Capital worked with the client and the new lender throughout the process to develop a comprehensive financing package that included accounts receivables, inventory, machinery and equipment.”
“The company was in the early stages of a turnaround when I contacted Speritas Capital,” noted the CEO of the client. “Jeff moved quickly, identifying the right lending partner and he led the refinancing process from start to finish. Jeff has a strong understanding of the ABL market and how to work with lenders for a quick closing. We’re very happy with the support provided and with the outcome.”
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