Flatbay Capital funds a $1.7MM bridge loan to a Houston, Texas-based provider of private fiber-optic connections to cities, municipalities, and educational institutions across the state. The commercial real estate loan was secured by an owner-occupied light industrial building whose main use is a data center.

The Situation?  Our client, referred to us by a banker, stood out from typical referrals due to their substantial positive cash flow. The issue with this particular client was leverage from an eight-figure enterprise value loan, given by the lending arm of a private credit fund.  It was this new loan that led to leverage covenant violations at their existing bank. With no choice but to exit, the bank called on Flatbay Capital to help with the takeout of their owner-occupied commercial real estate loan.

A High-Speed Solution!  The fiber internet company chose to restructure the business by strategically expanding into locations where they have experience and partnerships providing services instead of exclusively focusing on partnerships with major national providers. This approach enables the client to build upon their strengths and establish a more extensive business network. By shifting its focus towards this highly diversified client base, the company is able to reduce its client concentration and therefore simultaneously de-risk and grow the business.  The bridge loan provided will pay off the current banknote, with Flatbay Capital taking a 1st lien deed of trust. The borrower will become eligible for financing with a mainstream commercial bank in the future when leverage reduces either by a debt-to-equity conversion or reduction in the principal of the enterprise value loan.

“This deal would not have been made possible without our referring bank partner.  We are impressed by this company’s strong management and extensive business network. Though we were able to assist the company during a time of need, we anticipate our client company will soon return to conventional bank financing.”  ~Ethan Clasen, Flatbay Capital Business Development Officer – Houston, Texas

About Flatbay Capital

Texas-based commercial real estate (CRE) lender focused on owner-occupied transactions $1MM+.  We help business owners during times of transition - with the intent to help them pivot back to a bank within 12-36 months.  As a private lender, we are flexible on structure (P&I or I/O), term (24 to 36 months), and we can lend in most major metro markets.  We partner with bankers - you keep their treasury and we'll incubate the CRE for a few quarters.  We partner with factoring firms - you do the working capital, and we'll do the CRE.  And we partner with loan brokers -  loop us in and receive a full commission payout.  Contact us to find out how we can partner on upcoming CRE deals, www.flatbaycapital.com.