Lakepoint secures a $4 million refinancing and a fresh start for an auto parts franchise operator

This engagement came to us through a referral from the client's fractional CFO, which often signals a situation with enough complexity that a sharp set of financial eyes had already flagged it. The client was a franchise operator of a national auto parts chain who also owned a portfolio of income-producing industrial properties, held in a separate holding company. The properties themselves were sound. The problem was the banking relationship wrapped around them, and the client came to us to optimize financing that had quietly become a liability of its own.

To understand the challenge, you have to rewind a little. A flood, combined with a depressed resource market, had put real strain on the operating side of the principal's business. He had largely worked through the flood damage and returned to profitability, which is no small feat. But the recovery had required taking on additional leverage, and the way that financing was structured left him in a hole that was genuinely hard to climb out of.

Here is where it got complicated. The incumbent was the primary lender for everything, the operating companies and the industrial properties both. So when the operating side struggled, the entire relationship took the hit, real estate included. Worse, the borrower had been moved into the lender's "special accounts" group, the team a bank uses to manage loans it considers troubled. Once a client lands there, getting back to normal treatment is difficult, and the structural change this borrower needed was exactly the kind of thing chartered banks are reluctant to do for an account in that category.

A change of structure, and frankly a change of scenery, was required. We focused on the industrial properties, the healthy, income-producing part of the picture, and set out to refinance them with a lender that could assess them on their own merits. That was not entirely straightforward either. The properties carried some short-term leases, a bit of vacancy, and sit in an area many lenders consider remote. We prepared a Request for Financing that put the real estate front and centre, told the broader story honestly, and took it to our network. Two offers came back, and a credit union won with a $4,000,000 mortgage-secured term loan at 70% loan-to-value (the loan as a share of the properties' value), amortized over 20 years.

The numbers tell part of the story. The new financing delivered substantial interest savings, even after our engagement fee. But the bigger win was harder to put on a spreadsheet: a genuine fresh start. By moving the industrial property debt to a brand-new lender, we separated the real estate from a strained relationship and gave the client room to breathe, no longer with every facility tied to a single institution.