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The company, formed in 1971, is a distributor of lumber and building materials. Recently, they had tripped several covenants under their traditional working capital line and had a tight timeline to find other financing.
We provided an $8 million revolving line of credit secured by all the borrower's asset and commercial real estate to replace their existing line with the bank. We also closed the deal within a few weeks of being contacted by the borrower.
The flexibility of our credit facility, with a no-covenant base allowed the borrower to complete their turnaround plan sooner than anticipated. They reduced expenses, doubled their revenues in less than two years and became profitable. During this same period, we increased their credit facility from $8 million to $16 million, which included an inventory subline to accommodate sales growth. Within two and a half years of approaching us, the borrower transitioned back to our standard banking relationship and profitability.