Flatbay Capital keeps the ball rolling with another $2.3MM bridge loan funded for a Houston-based, aerospace machine shop. This deal was secured by the company's main operating headquarters located in one of Houston’s historically underutilized business zones (HUBZones).
About the Company
This women-owned, family business was established in 1980 by the late patriarch of the family and specializes in high-volume production runs and prototype manufacturing for major industries such as aerospace and defense. The versatility and quality of work have been a key strength for them over the last 40 years. However, when the original CEO of the company passed away, the company went into a transitional state before the new CEO and her sister, Chief Marketing Officer, came into leadership. With their combined experience, the company re-solidified its foundation and located the problems needed to be fixed in order to start heading back into the right direction.
The Situation
Covid-19 impacted industry-specific businesses in a myriad of ways. Some companies encountered financial strain directly caused by the pandemic while others were faced with the amplification of underlying problems that were not as easily identified as before. In this case, these underlying problems led the company into a tough financial situation, and the bank they were working with at the time did not want to refinance their note. When the new CEO came into leadership in 2022, she was able to trace these pre-covid issues back to high overhead costs and lack of budgeting while the company was in its transitional state.
The Solution
Despite the company's past financial situation, the strength in the new leadership team combined with a nice property and LTV created a great opportunity to help. Flatbay Capital was able to fund $2.3MM to refinance their current bank loan and provide extra cash to fund working capital. This deal is a great example of how relationships are built between our business development officers, their referral sources, and the client themselves. Houston Partner/BDO Vivian Thompson was able to go the extra length to understand the full background story of the client and provide a solution that would work for their specific needs, turning what was initially a decline into a new deal funded. From Vivian, “Working for a company that values its clients' stories is an honor. It's even more satisfying when you can help someone who's in a difficult financial position. Recently, we were able to help a client who was in turnaround-mode. Initially, we were hesitant, but the company’s CFO was invested in moving the business back into the right direction. She accepted where the company had fallen short and sought help from strong mentors and CFOs. It takes a lot of humility and determination to do that. We're proud to work with clients like her who are committed to doing the difficult things to achieve success”.
A Bright Future
In addition to our client’s ability to solve their past financial challenges, the company continues to find new sources of revenue. New deals include more projects from the Aerospace Industry as well as new opportunities with an upstate New York manufacturing company that has $700MM worth of projects they’re currently outsourcing. The hiring of new engineers have also increased their competitive advantage, as their experience allows the company to execute projects at lower costs and quicker availability. Overall, we are very proud to provide funding for another Houston-based company and are excited to see what the future holds for them.
Flatbay Capital specializes in $1MM+ non-bank commercial real estate loans/lines secured with owner-occupied commercial real estate.