Illustrative structure — Structured
A file no standard credit box fits
$2,400,000
Light manufacturing
This is an illustrative example, not a completed transaction. It is prepared to show how a structured facility is put together. It does not describe any specific borrower and nothing in it is an offer or a commitment to lend.
The situation
A manufacturer needs to buy out a retiring partner. The cash flow supports the obligation, but the file has features that put it outside a standard box: a concentrated customer base and a prior-year loss from a one-time event.
A conventional lender reads those two facts and stops. Neither is disqualifying once the file is actually read.
The structure
A bespoke facility combining a lien on equipment with an assignment of the specific contracts driving the concentration.
An interest-only period through the transition, stepping up to full amortisation once the ownership change has settled.
Covenants written to the two features that actually matter on this file, rather than a standard package that would trip on neither risk.
The outcome
The buyout closes on the retiring partner's timeline.
The step-up structure keeps the obligation inside cash flow during the months the transition costs the most.
At a glance
- Product
- Structured
- Security
- Equipment lien and contract assignment
- Use of proceeds
- Partner buyout
- Repayment
- Interest-only, stepping to amortising