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Do not underestimate the impact of the Coronavirus on a company’s Q1 and Q2 2020 financial results.  The supply chain issues are unknown, the potential economic slowdown is unknown, and the length of time the impact will be felt is unknown.

This will certainly be a standard excuse for performance weakness that will be heard over the next year.  Be prepared!

As a lender, which borrowers do you consider for impact, and what do you do to stay ahead of the problem?

Huntington Business Credit announced it closed a new $13,400,000 credit facility with Dutchland Plastics, LLC on December 20, 2019.  Proceeds of the facility were used to refinance existing debt and provide ongoing working capital growth financing.        

MidCap Business Credit announced today they have closed on an $8,000,000 asset-based credit facility for a manufacturer of precision components and assemblies in the aerospace and defense industry. The opportunity was sourced out of MidCap’s office located in West Hartford, CT. 

AccessOne, a leading provider of patient financing solutions designed to help consumers manage their healthcare costs, today announced it has recently closed a $225 million financing with PNC Bank, a leading financial institution with deep ties to healthcare. The strategic move allows the AccessOne platform to serve more consumers with effective patient financing options, simplifying the way in which patients pay for healthcare and improving the overall patient financial experience.

The Federal Paycheck Protection Program loan funds did buy many struggling businesses time to weather the proverbial economic storm. Plus, secured lenders, not surprisingly, found it much more advantageous to work with borrowers and extend liquidity than deal with a bankrupt business. The idea was simply that the pandemic couldn’t last forever and that the economy, as it is now, does appear to be on the mend.

Asset-based lenders were aware of the problems going into the pandemic. Not surprisingly, brick and mortar retailers, already facing significant financial stress before the shutdown, did take the brunt of the pandemic and many were forced to shutter stores, says Dan Karas, executive vice president of Allied Affiliated Funding, a division of Axiom Bank, N.A. Many large retailer liquidations dominated 2020, including J.C. Penney and Pier 1. The silver lining for lenders, as it turns out, is that liquidations were generally not the order of the day for most businesses, he adds. According to data from Epiq, commercial Chapter 11 filings grew year-over-year, up 29% in 2020 compared to 2019.

Siena Lending Group LLC (“Siena”) announces the completion of a $25 million asset-based revolving line of credit for Vault Pressure Control LLC (“Vault Pressure Control”). The facility was provided in conjunction with Pelican Energy Partners to fund the acquisition as well as for working capital needs to support future growth.

Vault Pressure Control, based in Houston, Texas, was formerly the Surface Pressure Control Flow business unit of the Oilfield Equipment segment of Baker Hughes.  The newly independent company is wholly focused on providing outstanding customer service and world-class products to pressure control customers in the US, Canada, Australia, Papua New Guinea, and Trinidad & Tobago markets.

In February, Otterbourg P.C. announced that Valerie S. Mason and Nneoma A. Maduike had been named co-chairs of the firm’s Lender Finance Practice Group. Otterbourg’s experienced Lender Finance team advises and represents the largest U.S. and global institutional lenders and regional banks, as lenders and mature lenders, sponsors supported companies, and strategics, ranging from startups to mature traditional lenders and funds, merchant cash advance companies, asset-based lenders, factors and fintech lenders, as borrowers, in “lender to lender” secured revolving credit and term loan facilities.

Middle market chief financial officers are facing widespread shifts—from trade wars to digital disruption—but they aren’t backing down from the challenge. According to BDO’s 2020 Middle Market CFO Outlook Survey, 56% of middle market CFOs expect a recession by 2021, but they are forecasting positive performance and forging ahead with growth plans.

In March, when the world suddenly and completely switched to “virtual” everything, quick, yet thoughtful, decisions had to be made by SFNet’s leadership and staff to ensure the Association could fulfill its mission of bringing together and representing those who provide the capital that fuels our economies.

“As it became clear that COVID was causing a seismic shift in just about every aspect of our professional and personal lives, the well-being of our staff and the SFNet Community became our priority. We also had to find creative ways to bring critical information to our members, as changes were occurring with head-spinning speed. In addition, it was vital for SFNet to continue to facilitate the connections that are so important now, during this time of social distancing,” said SFNet CEO Rich Gumbrecht. “We recognized the urgency of addressing our members’ most-pressing needs through impactful advocacy, providing crucial conversations through online events and sharing relevant and timely content."

Wingspire Capital Holdings is pleased to announce the completion of a $30 million senior secured loan to home furnishings retailer Arhaus, LLC to support the company’s daily operations and continued growth.

Wingspire Capital leadership was already familiar with Arhaus and its executive team, and welcomed the opportunity to support a growing and innovative retailer that has been redefining the home furnishing space for more than three decades.

The Innovation Finance Group will focus on providing a full suite of lending and banking products to growing technology companies across all stages of development, including asset-based solutions, recurring revenue-based revolving lines of credit, treasury management, foreign exchange and other solutions.

Fifth Third Bancorp (Nasdaq: FITB) announced today that Peter Gruebele has joined Fifth Third as senior vice president and San Francisco market executive. In this role, he will report to Joseph Yurosek, California market president for Fifth Third Bank.

Ryan Jaskiewicz is CEO of 12five Capital, LLC. He started 12five Capital in early 2006 at the age of 23. Jaskiewicz attended University of Illinois at Chicago where he received a bachelor of arts in political science.

The credit facility has an accordion feature, which allows the Company to increase the size of the credit facility to up to $500 million. On the closing date, the Company drew down $215 million of notes from the credit facility.

XL Funding provides floorplan loans to auto dealers in more than a dozen markets, and will use the funding to refinance a previous bank loan and extend capital to more small and medium-sized dealers in populous states including California, Texas and Florida.

Wingspire was attracted to XL Funding’s position of strength as consumers pursue affordable pre-owned automobiles amid the uncertain economy and a desire for “private” transportation during the coronavirus pandemic.