Do These Small Business Financing Scenarios Sound Familiar?
Timely financing is often a key driver for small business success. A Promontory Local CreditSM loan may offer a compelling solution for small business customers with the following needs:
- Alternative to equity or friends-and-family capital raising that may be expensive or impose unwanted governance requirements
- Substitute for seller financing if unavailable or tied to ongoing seller involvement or higher purchase price
- Refinancing of private equity in which a bank is able to replace some but not all of the existing financing
- Option for SBA loan prospects if their borrowing need is too large or does not conform with government requirements
- Strengthen post-transaction liquidity for capital constrained situations
Types of lending opportunities that may be a good fit for a Promontory Local Credit loan
Acquisitions/Partner Buyouts: IT & Telephony Services Firm
- Successful regional systems integrator; large, low-churn base of small- and medium-size clients.
- Owned by two partners—both have most of their personal wealth invested in their business.
- One partner seeking to buy out the other with significant goodwill in the transaction.
- Similar situations: ESOPs, professional practice transitions.
Refinancing: Steel Products Manufacturer
- Three industry veterans bought firm from retiring owner; unable to finance full purchase price.
- Firm secured private equity funding and owner accepted seller note (with continued salary).
- Seeking to redeem private equity investment/seller note and strengthen post-buyout liquidity.
- Similar situations: owner dividends, share repurchases.
Growth Opportunities: Physical Therapy Chain
- Owners have developed business for buying solo practitioner offices and upgrading them.
- No hard assets other than leased tables; expansion limited by earnings and personal wealth.
- Similar situations: opening new locations, servicing new contracts, add-on acquisitions.
Ineligible Collateral: Machine Parts Distributor
- Firm has grown revenues by 3x over the past 7 years; switched shipping from a single warehouse to using Amazon Logistics nationwide.
- Inventory is now considered to be “out of territory,” so bank will not lend against it by policy.
- Similar situations: specialized equipment, depreciated assets, work-in-process inventory.
Learn more about how the Promontory Local Credit lending solution can help community banks and borrowers.
This is not a commitment to lend or a guarantee of financing. All loans are subject to receipt of a complete application, credit approval, and other conditions. Products offered are not consumer loans. Terms are illustrative only, may not be indicative of terms that may actually result, and are subject to change at any time. Loans may be subject to commitment and other fees, as applicable.