No personal guarantees and $40,000+ per year in savings for multi-location auto parts retailer

Amount: $3,765,000

Lender: Chartered bank

Facilities: Operating line of credit, Commercial mortgages, Corporate VISA

Location: BC Interior

Goals achieved: Lower costs, Greater borrowing flexibility, Additional leverage

Industry: Retail / B2B

Annual revenue: $12,000,000+

In all of our engagements, our client hires us to achieve one (or more) of three primary goals, those being:

• lowering costs;

• obtaining greater borrowing flexibility; or,

• securing additional leverage

In this instance, we were delighted to be able to achieve all three! We were brought in by a 40+ year family business to assess the competitiveness of their existing commercial financing package. After a preliminary review, we pinpointed several areas that we felt could be substantially improved. We created a comprehensive financing request and delivered it to our trusted group of commercial lenders. Our initial assessment turned out to be 100% correct, and we found a new commercial lender that was eager to partner with our established, successful business owner client.

Here's how it all unfolded:

Lower costs: Our comprehensive process resulted in the client lowering the interest rate on their primary line of credit by 1.00%, resulting in $20,000+ in annual interest cost savings. We also reduced their monthly line of credit fee by $500 to $25, saving an additional $5,700 annually. Lastly, we were able to secure lower pricing and longer amortization periods on the client's commercial mortgages, creating additional interest savings and reducing mandatory principal payments.

Greater borrowing flexibility: For this client, we were able to remove margining requirements for their primary line of credit, eliminate personal guarantees, and free up two commercial properties that were previously being held as collateral by the incumbent lender. In addition, we were able to arrange a more equitable borrowing structure which clearly separated the collateral held by the lender between the client's holding company and operating company. This was one of the client's top priorities in engaging us, so it was great to be able to deliver it.

Additional leverage: We were able to increase the client's line of credit limit by $200,000, providing additional capital for growth opportunities.

If you are a business owner and want lower debt costs, greater flexibility, or more leverage, let's start with a 15-minute commercial debt review. We'll benchmark loan pricing, covenants, guarantees, collateral, and available leverage against what we are seeing in the market. We see 100+ term sheets a year and would be more than happy to see if we can put our proven strategies to work for your business.