In mid-2016 ASBF introduced our Mid-Ticket Finance offering. This product targets companies requiring between $250,000 and $2,500,000 who wish to leverage the value of their equipment assets to enhance their liquidity. To date our transactions in the Mid-Ticket line have ranged in value from $250,000 all the way up to $7.9 million.
To illustrate how our Mid-Ticket financing product works, we present are two case studies of actual completed transactions. In both cases, the end result of clients was increased liquidity and the ability to move their business forward to seize opportunity. Company names and salient details have been withheld to maintain confidentiality.
Sample Transaction – Service Supplier to the Mining Industry
A client in the resource sector approached Accord Small Business Finance for a business loan of $1.3 million. The purpose of the loan was to provide additional working capital. The client, a highly reputable operator in their industry segment, had experienced a couple of slower years, which was consistent with what had been happening across their industry. However, a significant turnaround in their fortunes was upon them, recently landing several significant contracts. The client approached their current financial institution (bank) for additional working capital to be used to commence activities related to the new contracts. The client’s bank not only declined to provide them with additional working capital, they requested repayment on the client’s existing credit lines. Accord’s facility allowed the client to repay the existing bank credit line in full and provided sufficient working capital for the client to proceed on their new contracts with confidence.
Sample Transaction – Service Supplier to the Oil Industry
A client approached Accord for financing in the amount of $250,000 to be used for working capital to help implement a management-developed restructuring plan. A successful operator for many years in the Alberta oil patch, the client, as with many others in the oil services industry, was dealing with the slowdown in activity in a proactive manner. The client wanted to make a material change in its business plan to seize other business opportunities that were presenting themselves to build upon what were previously smaller revenue streams for the business. The client came up with a very solid business plan – they were going to dispose of equipment on hand related to the historic lines of business, refinance the equipment they had on hand that they could utilize in the new opportunities, and use the combined proceeds of those activities to fund the working capital requirements of the change in business direction. The client approached their current financial institution (credit union) who initially requested a partial, and eventually complete, repayment of all of their existing financing. Accord’s facility allowed the client to repay the existing bank line, commercial mortgage facility, and provided sufficient working capital for the client to grow.
We’re pleased to say we’re currently reviewing several other transactions of this nature and invite all of our origination partners to call us to discuss client situations that may benefit from our Mid-Ticket offering.
Accord Small Business Finance provides working capital loans, with online applications, under the product banner AccordAccess. Accord Small Business Finance is a wholly-owned subsidiary of Accord Financial Corp.. Accord Financial Corp. is publicly listed on the TSX under the symbol ACD, and has been a leading provider of asset-based lending and working capital financing solutions for Canadian businesses for nearly 40 years.