Pari Passu Debt Funding for the Lower Middle Market up to $10 Million!

The owner of a very successful trucking company was finally ready to hang ’em up after 30 illustrious years in business. He specifically wanted someone to come in and take over his life’s work, a legacy buyer who would run it just like he did! Sam was a successful executive who was searching for something different and specifically wanted something in logistics. Now here’s the biggest question. How was Sam going to finance a $10 million dollar trucking company?

This business did not have a real estate component. It had a ton of refrigerated trucks and some real good cash flow that was sufficient enough to make us comfortable with providing $7.5 million in total loan dollars over a 10 year period. Here is the breakdown on this one: First $5 million using SBA 7A structure and $2.5 million in a conventional loan in pari-passu position. Sam put in $1 million of his own money and a seller note of $1.5 million covered the remaining balance. All in a days work!

Adam worked all over the globe in the oil and gas industry and it was taking its toll on him. He found this maintenance business in his home state of Alaska that could possibly be the start of an empire. We structured this acquisition with an SBA 7a for $5 million and a conventional note for $977K in pari-passu position. Adam wanted the seller to hold $960K which we allowed, and he injected the remaining $780K in cash which was approximately 10% of the total project cost. Not bad for a company that was pretty much all blue sky with not many hard assets at all.

Two long-time employees of a wood framing market leader in Colorado wanted to purchase the company from the current owners. The current owners were absolutely thrilled to be selling to someone in the organization itself. Now financing a $9.5 million dollar business acquisition is never an easy feat! We structured $5 million SBA 7a in first position along with a conventional loan in pari-passu position for $710K. This also included $600K in working capital which was needed to keep the business afloat for the first 6 months.

The buyers came in with a little more than $1 million in cash and the current owners actually agreed to a $3 million dollar seller note on the difference. They really wanted these two long-time loyal employees to have the business because they knew their life’s work would be in good hands!

Arthur and Daniel were trying to purchase a door and millwork company in Florida for just under $5 million. However, they were having issues with the financing because they only had a certain amount of SBA eligibility left. So here is a unique way we structured this acquisition.

We did the first note of $2,277,000 as an SBA 7a to max out their limit. Then, we did another $1,503,000 as a conventional note in pari-passu position. The buyers came in with $627,500 in cash which was approximately 13% of the total project cost along with a $400K seller note to complete the capital stack.