Worthy Lending, LLC Takes Majority Syndicate Position in a $2MM Inventory Finance Facility for A Southeastern Home Furnishings Company

Worthy Lending LLC (WL) provided $1MM as the majority participant in a finance facility designed to help a well-established home furnishings company with over sixteen years of servicing the consumer. This regionally known and respected retailer lost its bank financing and required a finance facility to consolidate some of its locations and build inventory for their upcoming busy season. Being a retailer, the accounts receivable finance option was not available (other than very expensive Merchant Cash Advances) and the only viable choice was a stand-alone inventory finance line of credit. Worthy Lending’s CEO, Alan Jacobs commented; “specializing in inventory finance, WL was offered a majority participation position in this syndicated loan. Our business model as both an inventory finance source and as a participant in loan syndications made this opportunity a perfect fit.”

This borrower currently working on re-structuring its financial resources and its business model experienced a downturn in sales when the US government reduced its services during the infamous “shut-down” of 2018. The resulting delay in tax refunds to consumers (the high season for this regional retail chain) caused significantly lower sales and the inevitable breach in financial covenants embedded in their bank line. Naturally the bank was required to retire the loan leaving this business, at a time when financial support was vital, without the ability to grow or even sustain operations. “The finance facility established through this syndication came at a perfect time for this company as it will provide the financial fuel to; a) pay off the existing bank loan now in accelerated amortization and draining cash from the business, b) close a few of its less profitable outlets and to c) purchase additional inventory for a revitalized sales effort,”  as explained by WL’s Managing Underwriter, Fred Leder.

As success stories go, this home furnishing chain received a financial lifeline just in time to stay in business and to return to its primary function of being a source of quality furniture for its communities. No longer does it have to focus on financial distractions of reduced cash flow, and phone calls form its bank-lender asking for payments and redirecting vitally needed working capital. “As a specialist in inventory finance, WL recognized the very attractive and liquid collateral securing this loan thus making the decision to participate in this loan an easy one” further commented Leder. WL looks for transactions designed to help businesses that can provide local folks with goods and services reasonably priced and supportive of a local community-based retail structure.

Worthy Lending, LLC is a lender providing ABL structures incorporating multiple sources of collateral specializing in stand-alone inventory transactions. With a flexible approach to financing the needs of sector-diverse businesses, WL offers ABL facilities ranging in size form $300K up to $3MM, or higher in specific instances. As an additional product line, WL purchases participations with other lenders and does not seek the Lead position.

For additional information regarding Worthy Lending, LLC contact Alan Jacobs it’s CEO at (561) 288-8467 or by email at alan@worthylending.com.