Platform
Our solution provided flexibility for the bank to be able to see the company operate and grow.
Limited financial history
Driving Growth for a High-Potential Construction Firm
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- Bank
- Texas based community bank
- Borrower
- Construction company
- Line of credit
- $4,000,000
- Collateral coverage
- $400,000
Situation overview
- Newly formed (2022) civil construction company with seasoned operators
- Year over year revenue growth extremely strong with several signed contracts in the pipeline
- Business opportunity referred by existing bank customer and located in a major market for the bank
- Borrower seeking to increase its existing line of credit to support future working capital requirements
- Great opportunity for the bank at a volatile time in the market
Underwriting concerns
- 01
Very little financial history
- 02
Asset-lite business
- 03
New relationship for the bank
Although financials were solid the company had less than 1.5 years of operating history. Most of the collateral securing the loan would be AR (no inventory). This was also a new relationship to the bank at a volatile time in the lending market.
Solution
Collateral
Quality collateral solution strengthened the AR heavy collateral securing the loan.
Bank Control
The bank gained flexibility, comfort with the underwriting and the option to see how the company performed.
Benefits
The CollateralEdge™ value proposition is designed to align incentives with our bank customer to win a commercial loan.
The bank was able to increase the line of credit to meet the borrower’s working capital needs.
The bank was able to make good on the referral provided by its existing customer. Strengthening two relationships in one transaction.
Executing this commercial loan enabled the bank to secure a fast-growing customer with tremendous potential fee upside.