ALTERNATIVE LENDING

We align strategic interests with commercial real estate asset owners and medium and lower-middle-market businesses with $5 million - $300 million in annual revenues who experience needs beyond the comfort and capacity of conventional lenders.  These needs could arise from fluctuations in historical gross revenues, entrepreneurs with numerous expense write-offs, and those with compelling positive event-driven scenarios that require near-term capital. 

As an asset owner with our own capital, we can be more flexible and creative with how we deploy our resources.

As we mature in a relationship, we will consider equity positions with board triggers to bring strategic value to assist in navigating complex situations, remove problematic partners, and open our Rolodex of relationships of existing business interests, including distributors and suppliers.

Small Balance Commercial Real Estate

In the sub-$10 million loan market, we focus on the multi-tenanted Class B/C commercial real estate assets across multi-family, retail, mixed-use, office, industrial/warehouse, mobile home parks, and single-family home portfolios. 

These are borrowers seeking permanent financing for up to 30 years who are just missing an underwriting box, seeking more flexibility with covenants, and failing to attract interest at the regional bank level. 

We typically lend anywhere between 50% - 75% LTC/LTV with interest rates between 7.5% - 11% with lower rates for multi-family if we are in a participating lending scenario with a bank. The most seasoned borrowers typically are conservative on leverage in the 50% - 60% range and typically attract the best rates and borrowers who seek higher leverage are typically paying 150 – 200 basis points higher. 

Sub-Institutional Semi-Conventional Commercial Real Estate

For borrowers with assets who are falling just short of the appetites of the life insurance companies, we deploy semi-conventional debt with terms for up to 10 years up to $35 million in Tier-1 and Tier-2 markets at rates as low as 6.5%   

(could be lower pending underwriting) and amortizing for up to 30 years.   

Assets include Class A/B Multi-Family up to 75% LTV, Single-Family Investment Portfolios up to 75% LTV, Industrial up to 75% LTV, Office up to 65% LTV, Retail up to 70% LTV, and Hospitality up to 65% LTV.

Situational Bridge/Mezzanine Commercial Real Estate

These special situations could include a Partner Buyout, Recapitalization, Chapter 11 Reorganization, IRS Payoff, Pre-Stabilization Financing, Real Estate Tax Lien Payoff, Discounted Payoff, and Vacant Building Acquisitions on all property types dependent upon the sponsor.

These will typically be terms up to 3 years (exceptions for up to 5 years) at a maximum of 70% LTV/LTC with rates in the 9% - 13% range on an interest-only basis. 

Minority/Majority/Joint Ventures will be considered on a select basis between $2 - $10 million (minimum equity multiple 2.5x) for seasoned sponsors in select markets. 

Corporate Finance

We strategically align with medium and lower middle market companies to deploy creative semi-conventional, asset-based, unitranche, and equity capital into manufacturers, distributors, healthcare-related companies, professional services companies, retailers, technology, and corporate-level renewable energy and aerospace/defense/aviation entities. 

These are $5 - $300 million enterprise companies that straddle the bankable/semi-bankable line at the regional bank level. 

We deploy capital across the entire debt table, including senior debt against cash flow and transactional finance against the borrowing base, supply chain, and contracts. This can also include sale-leasebacks against the real estate, equipment, and inventory. 

Additionally, we can consider minority, majority, and joint ventures on a select basis between $1 - $15 million (minimum equity multiple 2.5x) for seasoned sponsors in select markets, especially as a follow-on to our capitalization to the debt table. 

Expansion Term Loans

We will consider Expansion Term Loans designed to facilitate entrepreneurial growth, whether purchasing new equipment, inventory, hiring staff, or adding locations. Typically, these loan sizes range from $1,000,000 to $10,000,000 (higher amounts on a select basis) with fully amortizing terms between 5 to 15 years with fixed rates and floating starting at WSJ Prime plus a margin of 3.5%. 

These businesses usually possess a minimum operating history of three (3) years and generate minimum gross revenues of $3 million. We are targeting A/B credit, and any past bankruptcies must be dismissed/discharged for at least seven (7) years. Unlike SBA or conventional bank financing, this program does not require "additional collateral" in CDs, LOC, etc.

Asset Based Lending

We also utilize Asset-Based-Lending for scenarios involving dividend recapitalizations, growth, debt restructurings, debtor-in-possession, and turnarounds. 

On a non-recourse basis, it can provide financing to hyper-growth companies that require scalable credit lines based on their assets and projected growth. Situational needs involving letters of credit, trade, and supply chain finance are common scenarios. On a select basis, we can provide non-notification to your customers and other performance guarantees within the capital table. 

We can structure these facilities between $3,000,000 to $50,000,000 with dedicated syndication capabilities up to $100,000,000.

Revolver:

Up to 90% of eligible accounts receivable (foreign receivables financed in over 30 countries)

Up to 100% of eligible purchase orders with creative terms (will consider in-house light assembly)

Up to 60% of eligible inventory with higher advance rates available based upon appraisal.

Term Loans:

Up to 80% of the liquidation value of equipment

Up to 75% of the appraised fair market value of a real estate

Capital expenditure facilities are available to finance new equipment purchases. It includes M&E, vehicles, processing facilities, aircraft, mining, and other operational critical assets via sale-leaseback structures.

Unitranche Term Facility

Our unitranche facility is ideal for hyper-growth companies that require scalable credit term facilities based on current cash flows and quantifiable projected growth. It is a lower cost and favorable structure for lower middle market companies than traditional mezzanine structures and a lower-cost alternative to giving up equity in your company to perform aggressive growth strategies or address dividend recapitalization scenarios. 

Our commitments for this facility range between $10,000,000 to $50,000,000 with dedicated syndication capabilities up to $100,000,000 at 3.5x – 5x EBITDA. 

With a blended interest payment and waterfall, we start at SOFR plus 6% and target a minimum MOIC of 1.75x – 2x over five (5) years. 

Intellectual Property Finance

As another tool within our domain experience, we can leverage the value of a company's intellectual property (I.P.) portfolio to provide non-dilutive, patient capital for commercialization and expansion. 

Our general financing parameters range from $10,000,000 to $30,000,000 with dedicated syndication capabilities up to $100,000,000 for interest-only terms between 3 – 5 years. We target returns of a minimum IRR of 15.00% per annum and MOIC 1.8x to 3.0x

These structures include Senior Loans, I.P. Carveouts, Warrants, Royalty Acquisitions, and Select Patent Litigation and Judgment Monetization.