SG Credit Partners Provides $3.2MM Unitranche Loan - Collateral Based Term Loan A + Cash Flow Based Term Loan B

SG Credit Partners provided a unitranche loan to a Midwest-based specialty retailer of mattresses and accessories. The Company sells through 50+ stores as well as its Company-owned DTC eCommerce channel.

The retailer's CEO was looking to complete a management buy-out of the Company. The business was owned by a family office that acquired it through a restructuring a few years ago. After negotiating the purchase price, the management team needed additional capital to supplement their equity contribution to complete the acquisition and provide sufficient working capital. A traditional inventory borrowing base alone would not generate enough liquidity to fund the acquisition and support the working capital needs of the business.

SG provided a comprehensive solution by funding two tranches of term loans. The first tranche was supported by a borrowing base (advances against inventory) and required interest-only payments until maturity. The second tranche was structured based on the cash flow of the business with required interest and principal payments based on a 36-month amortization schedule. By using a hybrid approach of leveraging the company’s assets and cash flow, SG was able to provide the needed liquidity and did not require warrants or other equity instruments, which would have diluted the buyer’s ownership.

About Us:

SG Credit Partners is a national lender providing $1 - $10 million of situational capital to lower middle market businesses. Our deals are structured as a term loan (1st lien, 2nd lien, split lien, and unitranche structures; 6-36 month term) and range from interest-only to amortizing depending on credit profile and deal structure. What makes our platform unique is our ability to structure deals around a broad set of borrower types, use of proceeds, and situations – we can underwrite a deal solely based on cash flow, collateral, enterprise value, a strong/secured guaranty, or a combination thereof. Our borrowers generally fit one of the following credit profiles – cash flow, collateral, technology (recurring revenue/SaaS), or high net worth guarantor.

Headquartered in Southern California with offices throughout the country, SG Credit Partners has provided in excess of $300 million to 150+ borrowers across a variety of industries. We pride ourselves on flexibility, speed and certainty to close as well as providing creatively structured solutions that do not require equity and have minimal covenants. For more information, visit www.sgcreditpartners.com.