Borrower Advisory

A $24 million holiday goods distributor ties up $9.74 million in receivables and inventory at the end of October, against $6.8 million on an average month. A credit line sized on the average runs out in August and is $2.94 million short at the peak.

A ten-year-old excavator at half the price of a new one needs $16,000 more at closing and $467 more a month. Older equipment finances on shorter terms against lower appraisals, and the listed price shows neither.

A buy-sell agreement settles who can trigger a sale and exactly what the shares are worth. It usually settles funding in one sentence naming life insurance, which pays on only one of the five events that can fire it.

Acquisition leverage has recovered to roughly where it stood at the 2021 peak. On platform deals the senior layer has not, and the gap was filled by junior capital, which is not the pool most buyers approach first.

A term loan is sized once and never changes. A committed facility against recurring revenue is sized as a multiple of monthly revenue, and availability rises as that revenue rises, without a second underwriting.

Advance rate is the number every borrower asks about and the last one applied. Before it touches anything, the ineligibles come out, and on a $6 million receivables ledger they can remove $2.2 million without a single invoice being bad.

Customers moved from net 30 to net 60, which tied up an extra $1.08 million. The consequence shows up on the other side of the business, where $162,000 of supplier discounts go unclaimed every year because the cash is not there.

July set an all-time monthly record in equipment finance, and the coverage credited AI capital expenditure. Small-ticket volume set its own record in the same month, up 84.5 percent, and that is the segment mid-market borrowers actually borrow in.