Platform
Bank solved for collateral amount sufficient for credit to release the personal guarantee on the line of credit.
Replace a personal guarantee
Unlocking Growth by Replacing a Personal Guarantee
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- Bank
- Louisiana based commercial bank
- Borrower
- Electronic products solutions provider
- Line of credit
- $3,000,000
- Collateral coverage
- $2,000,000
Issued by UMB Bank
Situation overview
- Imaging solution provider on the verge of a significant recapitalization and new growth opportunities
- Existing customer of the bank and long-term bank relationship with leadership
- Borrower seeking to eliminate the personal guarantee on the line of credit while meeting bank collateral requirements
- Collateral support needed on $3.0M line of credit to restructure the collateral support
Underwriting concerns
- 01
Unproven growth opportunities
- 02
Difficult to value inventory
- 03
Unavailable personal guarantee
Significant growth expected post recapitalization but unproven. Specialized, hard to value collateral in terms of the borrowing base. Borrower has requested to eliminate the personal guarantee currently backing the line of credit.
Solution
Collateral
Letter of credit issued by UMB Bank provides significant collateral while the company settles post re-capitalization.
Bank Control
Bank in control of collateral, loan and customer relationship.
Benefits
The CollateralEdgeâ„¢ value proposition is designed to align incentives with our bank customer to win a commercial loan.
Bank was able to eliminate the personal guarantee but still have a 100% collateralized loan.
The bank secured significant deposits once the recapitalization was complete.
The bank is now well-positioned for future fee income and maintain a great customer by coming through with a timely solution for their borrower.