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Lakepoint secures a no-financial-covenant financing solution that preserves $260,000+ in capital

Location: Kamloops

Industry: Managed IT Services

Annual revenue: $13,000,000+

Loan products: Commercial mortgage, operating line, corporate credit cards, treasury and cash management

Total credit facilities: $2,700,000

Lender: Chartered bank

Primary goals achieved: Additional leverage, Greater flexibility, Lower costs


A successful, growing IT services company was referred to Lakepoint Capital by their corporate lawyer. The business had an accepted offer to purchase a residential property that they planned to use for staff housing. Despite the significant amount of cash flow being generated by the business, due to the somewhat unique nature of the property, their incumbent bank would only lend up to 60% of the purchase price ($1,900,000). 


Although the business had the cash reserves to complete the purchase with 40% down, they did not want to tie up this amount of capital on the purchase, and engaged Lakepoint to find the best possible financing solution for their needs. 


With only 48 days before the purchase was set to close, Lakepoint quickly put a comprehensive financing request in front of four chartered banks, receiving four offers back within eight business days. 


All of the offers received provided additional leverage, with solutions ranging between 75% and 85% of the purchase price. However, one of the options did not include any financial covenants whatsoever. This stood out because all of the other offers, and the incumbent bank, required financial covenants. Sealing the deal, this offer included interest rates that were substantially better than what was being offered by the businesses’ incumbent bank.  


The two owners of the business chose this offer, and despite the abbreviated timeline, the deal closed successfully, one day after the original completion date. 


By engaging Lakepoint, the owners of this business retained over $260,000 in cash (after Lakepoint’s engagement fee), lowered their interest costs, and achieved an enviable amount of covenant flexibility to run their business with.


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