Case Study

Working Capital

Securing new financing to service large customers

Growing distribution company seeks first debt raise for working capital needs

A self-funded custom building products distributor wanted to continue servicing large customers by seeking its first working capital loan. Since the company had never had an external lending partner, the financial statements required third party adjustments to prepare them properly for the debt raise. Additionally, due to the bespoke nature of the products and materials being manufactured in the EU, there was a complicated cross-border working capital cycle to explain to potential lenders.

Cerebro’s data-driven lender matching process identified three potential pools of lenders: commercial banks, non-bank asset based lenders, and PO finance lenders. By accessing all three, Cerebro could present the company with a broad scope of options. Written term sheets were delivered by all three pools giving the company maximum competitive pressure. Ultimately, the company selected a non-bank lender who offered an ABL-light structure based on monthly borrowing base. Given the debt markets favorable response to their credit request and the ability to upsize their credit facility in the future, the company is planning for more aggressive growth than originally anticipated.

Winning Term Sheet

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