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How did Cerebro help a middle market company secure a recent financing?
Misconceptions
Cerebro Capital recently assisted a middle market company in accessing financing for an acquisition. The borrowing company was short on time and resources so they turned to Cerebro to facilitate the process. However, they didn’t expect much differentiation in term sheets. They incorrectly perceived the banks to be very similar in their offerings. The results of the deal proved to them that running Cerebro’s streamlined process not only saved time but got them the best deal in the market.
Process
Based on the metrics of the deal, the company matched with a list of both bank and non-bank lenders on Cerebro’s Lender Network. After a thorough discussion with the company, Cerebro’s team further qualified the lender list to bring a diverse and competitive group to the deal. Within 21 days, lenders returned term sheets and the borrower was surprised to see the material variances between loan amounts, collateral required, and the need for personal guarantees.
Results
Had they simply refinanced with their incumbent, they would have had to put twice as much equity into the acquisition compared to the other lenders Cerebro brought to the table. It should also be noted that there were several other lenders which were unable to deliver any term sheets despite the fact they were similar sizes and brands. Had the borrower only selected these lenders in their RFP, they would have incorrectly believed their deal wasn’t financeable at all.