In line with our turnaround theme, we received the below from our friend Adam Flomen at Accord Financial. Accord is a potential source of funds for troubled businesses.
If you need capital to support a turnaround, we are sure Adam would be happy if you contacted him directly at firstname.lastname@example.org. Or, contact Range Advisors and we will be happy to assist.
Also, remember to check the Lenders/Investors section of our site for additional Lender releases.
Financing Turnarounds for SME’s (from guest writer: Adam Flomen)
In recent years, our capital markets have proven very capable of financing the turnaround plans of large entities, with many examples of high profile companies with significant tangible net worth and/or enterprise value that have successfully tapped the high yield debt and asset based lending capital markets for support.
However, small and medium sized businesses that require less than $10 million in financing to finance their turnarounds have few options. The commercial banking units of the chartered banks are not equipped to assist such companies, and they are not large enough to attract financing from the asset based lending units of the banks or other domestic and foreign capital providers.
Accord Financial Inc. (“Accord”) and its predecessor company, Montcap Financial Inc., have been actively financing the turnaround plans of small and medium sized businesses since our formation in 1990. Approximately half of our clients come to us in turnaround mode, usually after they have tripped the covenants of their existing senior lenders, and for a whole host of reasons. In these situations Accord rolls up its sleeves to quickly understand and assess the turnaround plan put forth by management. Of course asset coverage is always a requirement, but more than that we seek to finance viable businesses with temporary issues that can be solved, usually within a period of one year if not sooner. Last year we financed several turnarounds by providing senior debt financings of $500,000 to $8 million to clients in the transportation, food, plastics manufacturing, and apparel industries.
While Accord is primarily known as an accounts receivable financier, we are able to, and often do, finance all categories of their tangible assets in addition to accounts receivable, especially inventory and machinery and equipment. For those that qualify , we are also able to finance receivables on a non-notification basis. In these situations we are technically purchasing or discounting receivables, but using lox boxes or our address to receive customer payments and allowing the company to remain in control of its collection process minimizes any potential negative perceptions associated with factoring. Accord is therefore a true asset based lender and has proven very capable of financing small and medium sized businesses through challenging circumstances. We expect that the challenges facing Canada’s SME’s will continue through 2012, and we remain ready, willing and able to support viable businesses with effective turnaround plans. Accord is a wholly owned subsidiary of Accord Financial Corp. which is publicly traded on the TSX (symbol “ACD”, www.accordfinancial.com).
Posted by Scott Sinclair
Range Corporate Advisors provides multidisciplinary solutions to medium and small businesses requiring transitional, transactional or management assistance.