A closely-held company was in technical default on two credit facilities (aggregate $1.6 million) for three months, facing formal default and lender action.
A NextLevel executive served as an adviser to the CEO, implementing the following actions:
- Immediately contacted appropriate loan officials at the company’s bank and opened a detailed dialogue. This dialogue resulted in an agreement with the bank, based on the updated cash flow projection, to continued forbearance on debt repayments, and a structured schedule of client takeout financing activity.
- Prepared two analyses: (1) a modified internal cash flow projection, with detail sufficient for the bank, and (2) a four-year capital needs model, with detail sufficient for new investors.
- Client expenses also were reviewed, eliminating non-essentials, and vendors were temporarily extended.
- The NextLevel executive also worked with the client’s investment bank and attorney to identify potential equity and debt capital investors, including those from existing business relationships.
NextLevel’s expertise helped the company achieve the following results:
- Acquired emergency bridge financing from business partners, providing funding for basic business operations through the crisis period.
- Obtained $1.6 million of takeout financing to pay the bank back in full, and obtained an additional $2 million of working capital financing to grow the business.
- A full capital plan for the current year, and a detailed picture of potential future sale opportunities and valuations.