Asset-Based Financing for Middle Market Companies
Delivering senior debt capital when needed most.
Because finding the right solution for your business is our business.
Maple Bay Business Capital is a Chicago-based provider of asset-based revolving credit facilities and secured term loans to working capital-intensive companies, generally with revenue of $25 million to $150 million.
The situations where Maple Bay’s approach makes the difference.
Middle market companies change lenders for many reasons. Some outgrow their current lender and need a larger, more flexible senior financing partner. Others find their credit profile has changed and they no longer fit their lender’s credit box. Either way, an asset-based structure can provide a fresh start built around the business as it is today.
Asset-based lending is well suited to seasonal businesses because borrowing availability often rapidly rises and falls with receivables and inventory. Seasonal advance rates can add capacity exactly when it’s needed most, even when inventory and receivables peak at different times of year.
Companies working through a challenging period often need more flexibility, patience, and sometimes additional capital. These periods often coincide with a need to restructure a broken capital structure.
For asset-intensive companies, an asset-based approach often provides the most senior debt in a change of control. In a new platform buyout, the senior debt structure is built on the target company’s assets and cash flow; in an add-on acquisition scenario the financing is based on the assets and cash flow of both companies.
When a division with meaningful working capital assets is carved out of a larger company, ABL can be an effective financing solution. Carve-outs often have limited stand-alone financial history, which can make cash flow lenders hesitant, while asset-based lending focuses on the performance of the collateral being acquired and the new vision.
Fast-growing companies often need a lender focused less on financial ratios and more on their expanding asset base. With ABL, borrowing capacity grows immediately as receivables and inventory grow, and new or used equipment needed for expansion can be financed as well.
Frequently, it is beneficial for a company to reassemble its balance sheet capital structure. This may include a borrower taking on additional senior debt to pay off sub- or seller-debt or even meet an earn-out obligation. It could also include taking on additional senior debt against a low leveraged asset base to pay a dividend to investors or pursue other strategic initiatives.
Bringing substantial experience and a broad network of relationships to lower middle market companies, their owners and most trusted advisors.
Targeted financing
Clear Communication from the initial meeting, through prescreening, closing and for the life of the relationship.
