Asset Based Loan Funding Announcements

Asset Based Loan Funding Announcements

Huntington Beach, CA Huntington Coast Capital is proud to announce that we secured $525,070 in new asset based term loans for our clients through the first two weeks of February! The loan details are as follows:

  • A $350,000 asset based loan for a distributor of cell phone and tablet accessories. The company once had sales of over $20,000,000 a year and had a $1,000,000 line of credit with Bank of America. However, margins in the electronic accessories industry are becoming increasingly thin with all the big players entering the market. In 2017 the company made the conscious decision to exit the high volume, low margin business and pursue the smaller volume, but higher margin business. As a result, their profits were not greatly effected, but their gross sales went down and thus their need for a $1,000,000 line of credit. Surprisingly, Bank of America asked them to find a new lender as they do not provide lines of credit of that size to their clients. They are interested in the larger borrowers. The pressure to find an asset based loan was mounting as the requirement was to pay off the entire $350,000 as quickly as possible. Huntington Coast Capital was able to find them an asset based loan to get them out of their predicament! With an asset based term loan now in place, the company can re-focus on operations with Bank of America off their backs
  • A $175,000 asset based loan for a restaurant owner. An established restaurant owner was looking for a loan to open a new concept in a second location. Due to the company ownership structure that included investor unwilling to guarantee the loan, a little creativity was required to secure the financing they were looking for to expand. HCC was successful is obtaining an asset based loan for the company after numerous lenders on both the private and institutional side. There was no interest from a number of SBA lenders and the loan was ultimately completed by a non-SBA lender offering a 10-year asset based term loan. The term of the loan kept the payments down and allowed the company enough cash flow to carry the new project.
  • A $70,000 asset based loan to a physicians consultant company. A consultancy group came to us looking to refinance some high priced MCA loans or merchant cash advance lenders. These loans are expensive to say the least and they often require direct daily debits from the bank account of the client. With high interest sucking the cash flow out of the company, they needed answers quickly. HCC secured an asset based loan to refinance these high priced lenders and also provided for a portion of cash out to be used as working capital for some new contracts coming down the pipeline.

If your company could benefit from an asset based loan or if you are in need of an asset based loan for a commercial real estate purchase or refinance, we would like to speak with you.

HCC Secures Asset Based Supply Chain Funding Line

HCC Secures Asset Based Supply Chain Funding Line

Huntington Beach, CA Huntington Coast Capital structured over $1,000,000 in asset based supply chain funding with three separate providers for an importer/distributor of home saunas.

The primary products of the company are heaters and sauna cabins. The sauna cabins are constructed with quality with either Western Red Canadian Cedar or North American Basswood. The furniture grade cabins are designed to provide you with maximum comfort during your sauna session. Deep, reversible and ergonomic back rests, thicker walls, elegant details, exterior lighting and beautiful craftsmanship are just some of the luxury exclusives found in their saunas. Their heaters feature a high output combination of carbon/ceramic far infrared and full spectrum heaters.

The asset based loan solution: The company sells the heaters and saunas both domestically and internationally. Domestic sales are done primarily online direct to the consumer while international sales are handled through a distributor. The vast majority of sales are domestic and direct to the consumer. The company needed to build inventory to meet demand and grow sales. Demand was further elevated when they partnered with Jacuzzi on their sauna cabins. Jacuzzi, an internationally recognized brand, bolstered the company sales virtually overnight.

Because most of their sales were direct to the consumer, traditional asset based loans would not work for them. Asset based loans most typically require accounts receivable and inventory as collateral and in this case, would not yield the amount of capital they needed to increase purchases from their suppliers.

Supply chain financing has a slightly different approach, but gets the business to the same end, which is additional capital to cover the cost of goods. In a supply chain financing arrangement, the lender pays the supplier and gives the client up to 120 days to pay them back. It is not classified as a loan and as such, can work in conjunction with other asset based loans or bank lines the company may already have in place. It is a clever solution to meet the needs of companies looking for more capital when they are already maxed out with their traditional lenders.

There are a few qualifications necessary in order to be approved for supply chain funding. Namely, the company must have gross revenue of over 10 million dollars, showing a net profit and have positive retained earnings. While certain exceptions are sometimes made, this type of asset based loan is not available to companies in the start up phase of the business. Because it is an unsecured line of credit whereby the lender effectively becomes another vendor on the company accounts payable aging report, the credit history and financial strength of the company must be strong.

Could your company use this form of asset based loan? If so, we would love to speak with you 714-719-8966.

To your success!