What Are the Benefits

Goals & Objectives

Bank Partner

  • Create repositioning plan matched with estimate of timing of market and collateral value improvement, sale or liquidation
  • Right-size Bank’s credit facility to conform with borrowing base
  • Match available cash flows to Bank’s reduced debt service requirements
  • Prevent dispute with Borrower over collateral liquidations, debt service, loan repayment, annual operating expense funding or loan guarantor issues, transfer asset control risk off bank’s balance sheet if necessary
  • Ensure Borrower’s credit facility with Bank remains accruing and performing, for full term where possible, avoid interim TDR classification and prevent costly SVA reserves
  • Third party funding partner with SECAP, with industry expert experience, provides additional Borrower oversight and quarterly reporting to Bank
  • Managed and timed collateral liquidations by Borrower in most favorable market conditions during term, verses distressed sales or forced asset repossession and liquidations at inopportune times by Bank
  • Accommodate¬†both GAAP and regulatory accounting

Borrower

  • Reposition provides Borrower time to manage business for maximum cash flow and asset liquidations in better marker conditions
  • Borrower remains in ownership and in control of business in certain situations
  • Avoid asset sales into distressed markets, create opportunity for market conditions and collateral values to improve
  • Cost to reposition is fraction of cost of raising new equity, or liquidating the business, plus all costs are potentially deferred to maturity or point of asset sale
  • Guarantors avoid disputes over loan guarantees, deficiency judgments and costly litigation
  • Borrower gains additional strategic funding partner with SECAP¬†and assured debt service for bank loan and operating expense funding for full term