eCapital funded an $18 million asset-based lending facility for a leading commercial linen services company. This transaction not only demonstrates eCapital's commitment to supporting mid-market businesses but also highlights the value of its industry expertise in providing timely financial support to a business at a crucial turning point.
A commercial linen provider servicing the food & beverage, hotel, agriculture, industrial, and healthcare sectors found itself at a crossroads. After completing an acquisition, the company faced covenant violations with its current bank lender due to the sizeable inventory investment required to get the newly acquired company up and running. The bank lender considered the inventory purchase a fixed charge, resulting in a reduction in availability and jeopardizing the company’s operations and the interests of stakeholders, including the financial sponsor and mezzanine lender.
Responding swiftly to the urgency of the situation, eCapital stepped in with a customized asset-based lending solution that took into account the nuances of financing linen goods. A deep understanding of the product lifecycle enabled eCapital to provide vital support to the struggling company. A referral from a bank mezzanine group, facilitated after meeting at a private event where eCapital's track record left a lasting impression, laid the foundation for collaboration.
Through thorough evaluation and customized finance structuring, eCapital engineered a flexible facility that not only relieved immediate pressures but also paved the way for sustainable recovery. By securing increased availability with minimal covenants, eCapital furnished the company with the essential support needed to continue its journey toward revitalization with confidence.
Brian Cuttic, CEO, ABL, at eCapital, commented, “This transaction was the result of collaborative partnerships with the banker, financial sponsor, mezzanine lender, and eCapital, all working together to prioritize the client’s needs. Our ability to understand the unique characteristics of their industry, along with the increase in availability played a critical role in meeting the company's urgent requirements. The client's confidence in our proven track record led to the referral, and we were pleased to deliver tangible support when it mattered most.”