The client is a digital marketing agency in the Okanagan, owner-operated by two spouses who have run it for more than twenty years. It works out of a small commercial unit it owns, and most of what it earns is recurring work for clients who stay. Its borrowing had accumulated in pieces. Equipment had been financed by lease as it was needed, and other debt had been taken on at various points, each with its own rate, term and payment date. Leases can be easy to sign at the point of purchase but end up being expensive across their life. Added together, the company was carrying a set of obligations that nothing about its actual credit quality justified.
The complication was the size. A requirement under $400,000 sits below the level most businesses assume is worth running a process over, and below the level at which most commercial lenders will spend much effort.
We prepared a financing request anyway, and presented the company properly: two decades of operating history, revenue that recurs, and principals whose personal covenant was meaningful. Then we took it to lenders who would actually look at a file this size.
Lower costs: a credit union consolidated the borrowing into two term loans at prime plus 1.00%, saving the client tens of thousands in interest costs and mandatory principal payments per year. The larger term loan was secured by the unit the business occupies and amortized over twenty years. The smaller loan clears the equipment leases over ten. One lender, one rate, two payments, against a stack of separate obligations priced separately with multiple lenders, all of which were higher than Prime + 1.00% and amortized over a shorter period than the debt Lakepoint arranged.
If your borrowing has accumulated in pieces, and especially if some of it is equipment leases you have never gone back to, let's chat. We'll start with a 15-minute commercial debt review and we will benchmark your pricing, covenants, guarantees, collateral and available leverage against what we are seeing in the market right now.
