Cashflow Lender Refinance

August 05, 2021

by a searcher from Cleveland State University in Akron, OH, USA

We have built out business using SBA and alternative credit products. We'll be at a place early next year to execute a proper refinance with a lower middle market senior lender who will underwrite on cashflow. We are asset light and while we're happy to give a first lien there isn't much traditional hard collateral because we're in eCommerce.

I am looking for recommendations/intros to cashflow lenders who would want to refinance asset-light cashflowing eCommerce businesses.

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Reply by a lender
from Clemson University in Reston, VA, USA

This is what we call a recapitalization, and as long as there is positive equity, lower leverage less than say 4x at closing with step down provisions, and good cash flow, most senior lenders can do this. Typically you will see a 5 year max term but you'll probably see some type of cash flow recapture if the cash flow is above 2x. You can use your A/R as the collateral as well as business assets, even if they are small, something to us banks is better than nothing. The bank is most likely betting on you as the owner and your own personal financials as well. More than happy to talk over the phone. Feel free to email me and we can set up a time to chat. redacted

Reply by a lender
from The University of Chicago in Schaumburg, IL, USA

If the company has definitely outgrown SBA financing and is not backed by a funded sponsor, SG Credit is aggressive on smaller cash flow deals. If you care to contact me via hgravenhorst@bylinebank or###-###-#### , I can suggest a name or two at that shop and others.

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