In three decades, we have learned that no two transactions are structured or priced in the same way. Each borrower has its own unique cash flows, capital needs, return targets and infrastructure limitations. i2B provides both term loans and hybrid revolving lines of credit. We start by listening…to the past history, the current performance and the future goals. We then move forward with a collaborative approach in structuring a financing facility to meet the capital requirements of our borrowers while providing sufficient risk mitigation for our investors. We do not want to close transactions that aren’t a win/win for all constituents and we pride ourselves on the ability to draw from our decades of experience in underwriting and closing billions of dollars of senior secured loans to structure transactions that meet everyone’s objectives.
Revolving Credit and Term Loan Structures
Our Target Customer
Our clients include financial entrepreneurs, debt buyers, family offices, private equity sponsors, and high net worth individuals who currently own or are running consumer or commercial finance companies or who acquire financial assets or revenue streams as their primary line of business. Assets classes financed include: accounts receivable, Inventory, purchase orders, production cost, factoring, bad debt, charge offs, delinquent assets, litigation, medical receivables, SaaS Contracts, contractual reoccurring revenue, new loan originations, commercial contracts, consumer installment contracts, liquidation bids, and many others.
They have proofed their concept and have some first loss capital invested but need additional senior debt capital to grow. We typically do not lend to start-up operations unless the entity is a “re-start” of an existing business with a historic track record available to evaluate.
The reason for the revolver or term loan is to support growth, acquisition, refinancing a smaller credit facility or a new line of business that might not be eligible under an existing banking facility due to the “newness”, the industry involved or both. Our loans support asks of $3- $20 million of growth need.
Our transactions are designed to first provide sufficient working capital to grow the business to a level where it is attractive to more traditional bank or asset based lenders. Many of these traditional institutions are regulated entities or are owned by regulated entities, therefore, size is not the only criteria they use to qualify new borrowers. We help each of our clients develop the infrastructure, reporting and other finance driven disciplines necessary to become bankable. More than just money, we lend our expertise as commercial bank lenders to get our clients ready for the next level of financing. Our goal is to graduate 100% of our borrowers to larger and more cost effective financing as soon as possible and we work every day to help each one achieve that goal.
We start with a simple summary of business terms agreed upon in writing early in the process. Our term sheets are written in plain language and do not require attorneys time and money to negotiate.
The next step in our process includes an on-site visit from our senior management team as well as due diligence performed by a third party familiar with our borrower’s particular industry niche seeking to confirm the accuracy of historic financial reporting and ability to comply with reporting requirements going forward. In addition, we perform background checks on the owners and management of our clients.
Lastly, we obtain our formal credit approval once due diligence is complete, execute our documentation and fund.
No two transactions are alike; however, all of our senior debt transactions are fully secured by receivable based assets or quantifiable revenue streams. We offer borrowing base driven hybrid revolvers that settle weekly. bi-monthly or monthly as well term loans with equal amortization, amortization tied to cash flows or bullet amortization – all based upon the underlying type, term and quality of the underlying asset class. Interest can be paid currently, paid in kind (PIK) or a combination. Our facilities range from six months to two years and can be extended based upon certain conditions being met or based upon mutual agreement. We can start small ($3 million) and grow large ($20 million +). Financial covenants are unique to each business, focus on the most important criteria of the borrower’s financial well-being and are set to trip at a time when restructuring options are still available. We have successfully and efficiently negotiated loan and security agreements, intercreditor agreements, guaranty agreements, subordination agreements, pledge agreements, third party servicing agreements, deposit account control agreements, and other transaction documents because we take a business approach to getting accord on material issues early in the process.
“Cookie cutters are for cookies and we don’t like to be stuck in a box.”
We are smart, experienced and creative entrepreneurs ourselves who like lending money to other entrepreneurs who are as well. If you need senior debt to grow your early or mid-stage specialty finance business, you need to be talking to the entrepreneurial lenders at i2B Capital.