The 2020 pandemic has created financial stress for many businesses throughout the country. Many of these are well-run companies challenged by forces beyond their control. During exceptional times, bank lending restrictions and standard loan structuring methodologies may not provide enough flexibility for companies. Gibraltar prides itself on understanding the situations our clients face and creating flexible financing structures to meet their challenges head on. This enabled Gibraltar recently to provide Ditto Sales Inc. with a $4 million asset-based loan to help them manage through obstacles faced by their business.

Ditto Sales was founded in 1939 as a manufacturer’s representative for furniture hardware and finishing supplies. Later, the company added sales of woodworking machinery and custom fabricated metal furniture parts to the manufacturing mix. Since 1985, the company has also designed, manufactured and sold built-to-order office furniture under the Versteel name, primarily to the education, healthcare, government and corporate markets.

Restrictive Conditions Inspire Search for New Credit Facility

In early 2020, when Ditto faced operational challenges due to the pandemic, the company hired Concord Financial Advisors, LLC based in Chicago to help them find a creative financing solution with optimal terms. Concord introduced Ditto to Gibraltar Business Capital.

GBC senior management invested significant time with Ditto’s owner and management team early in the process. They served initially as a business advisor to help the company understand the new lending environment and what expectations they should have of their lending partners during these unusual times.

A strong relationship was established. GBC supported and advised Ditto as the company experienced changes within its leadership team and adjusted to the changing economic landscape.

Solution Involves Flexible Approach to Credit Facility

Ultimately the relationship established between the two companies resulted in Gibraltar providing Ditto with a $4 million line of credit based on Accounts Receivable and raw-material and finished-goods inventory.

Gibraltar’s solution involved a flexible approach to setting financial covenants, providing the company a runaway to address industry and pandemic related challenges. Gibraltar offered advances against working capital assets in line with asset valuations and business liquidity requirements.
In addition, despite Ditto being a closely held company, Gibraltar required no personal guarantees.

This flexibility in the face of extraordinary circumstances, based on Gibraltar’s understanding of their client’s sound business base, gave Ditto the liquidity to implement a plan to help the company navigate COVID related challenges and establish a clear path to success.