Ares Commercial Finance announced today that it has provided a senior secured credit facility to Hint, Inc. The credit facility consists of an asset based revolving line of credit. Proceeds of the credit facility were used to refinance existing indebtedness and for ongoing working capital to support growth. 

Lenders are faced with difficult circumstances when a borrower’s business and the bank’s collateral is deteriorating.  The downward spiral often includes declining or negative earnings, insufficient cash flow, declining enterprise value, escalating trade debt and “tripped” financial covenants.  Further, management has not been able to reverse these negative trends and worse, have likely not been able to forecast these problems before they were reported. This will certainly erode trust between a borrower and their banker. When a lender is primarily concerned with protecting its collateral in a deteriorating situation, measuring alternative options can be considered relative to control, time, exposure and cost.