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The Capital Advance Industrial & Manufacturing Finance Group understands that these companies are the engines that drive the economy and sustain growth. The issues faced within this sector are diverse and complex. Cost reduction, environmental issues, increased operating performance expectations and industry globalization are just some of the challenges.
In this highly cyclical sector is makes sense to have an arsenal of financing options at your disposal and a team who understands your objectives. Whether you are implementing a new product line or strategically outsourcing a key component of your process- a variety of lease and financing options can help you to achieve your goals.
We are pleased to provide you with the following Solution Profiles from our Industrial & Manufacturing Finance Group for your review:
The United State’s largest playground equipment manufacturer hit a soft period in its business cycle and was seeking alternatives for generating additional working capital to help them through the economic downturn. Capital Advance suggested a sale & leaseback on all of their plant equipment and an off balance sheet lease structure to help them maintain debt covenants with their lead lender.
Capital Advance performed an appraisal on all of the equipment and was able to generate over $10,000,000 in working capital for the company through the sale and subsequent lease back of their industrial equipment. The Operating Lease was also structured with an early buy-out provision, so the company would be able to have a fixed cost option to buy-out and terminate the lease in the future.
A regional custom glass manufacturer was upgrading equipment and tripling the size of their manufacturing facility. They were acquiring cutters, furnaces and conveyor systems to support the demand for their product. Although the company had been in business for over 65 years, they were still closely held and took significant shareholder distributions each year. As such, cash flow was always an important factor in their decision making.
Capital Advance provided an equipment line of credit for all of their expansion needs without the personal guarantees of the owners of the company. The lease was structured with a 72 month fully amortizing term with two years of lower, ramp up payments, followed by level payments to provide lower cash flows until the equipment became fully utilized.
The nation’s second largest exporter of paper was aggressively expanding their business but required increasingly larger supplies of raw paper material. The company approached a large waste management company about entering into long term paper supply agreements but had to compete on a price basis for these contracts with a variety of other companies. The challenge was in differentiating their bid for the supply contracts and to compete on a non-price basis.
After consulting with Capital Advance, a solution was engineered whereby our client would offer to purchase and leaseback $7,000,000 in necessary equipment upgrades to the supplier’s recycling centers in exchange for securing the supply contracts. The client financed the equipment and installation cost with Capital Advance and in turn set up a sub-lease agreement with the paper supplier.
This solution provided the benefit of below market lease rates and “off-balance sheet” treatment for the financing of the equipment for the paper supplier and helped to secure the paper supply contracts for our client. The Capital Advance team prepared and presented the solution ROI analysis, provided the underlying financing for the equipment and supplied all of the documentation related to the financing and sub-lease agreement.
A North Carolina automotive parts manufacturer was installing two new HVAC units at a cost of $1,500,000 and required a ten year financing to help manage the cash flow associated with the investment in their facility. The manufacturer approached their lead banking relationship but after a three week process that yielded no results, turned to Capital Advance to arrange the financing. Within 48 hours, Capital Advance was able to provide a credit approval for both the ten year term financing and implementation finance for the construction and installation of the project.
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