Lakepoint secures $1.6 million in cash flow financing for an asset-light brokerage

This engagement came to us through an existing relationship, which is often how the most interesting conversations start. The client runs a national residential mortgage brokerage, a business that has grown rapidly over its first five years under a principal with more than fifteen years in the industry. He knows residential lending inside and out. What he wanted, though, sat squarely on the commercial side of the fence: a way to borrow against the brokerage's track record of earnings. The business carried no existing debt, which sounds like an advantage, and in many ways it is, but it also meant we were starting from a blank slate.

A few things made this deal genuinely tricky.

First, what the client was asking for is what lenders sometimes call "equity take-out" financing: borrowing against a healthy business to distribute out of the business, rather than to buy business assets or fund expansion. Some lenders get cautious here, because the loan funds a personal goal instead of an asset they can point to on a balance sheet.

Second, the brokerage's EBITDA (a common measure of operating profitability) had been climbing fast. That is a good problem to have, but commercial lenders tend to underwrite by looking backwards at historical results, so a business growing this quickly can actually be harder to finance. The strongest year sits ahead of the historical average a lender anchors to, and they have to get comfortable that the trend is real.

Third, and maybe most important, there was nothing tangible to pledge as security. A mortgage brokerage is about as asset-light as a business gets. No building, no fleet, no inventory. The lender would essentially be lending against the durability of the cash flow itself.

So we built the case. We prepared a Request for Financing that told the story properly: the strength and consistency of the earnings, the depth of the principal's experience, and a clear explanation of why that cash flow would keep showing up. Then we took it to our lender network and ran a competitive process. Two offers came back, and a chartered bank came out ahead with a five-year amortizing cash flow term loan of $1.6 million at competitive rates.

The real value here was not a basis-point comparison against an incumbent, because there was no incumbent. The value was execution, getting the deal done at all. Our client is an expert in his own corner of lending, and he was the first to say that commercial cash flow financing is a different animal. He recognized that this is exactly what we do every day, and he let us do it.

If you run a profitable business and have ever wondered what its cash flow could unlock, that is a conversation we are always glad to have.