Total financing secured: $4,375,000
Lender: Chartered bank
Location: Okanagan
Industry: Food & beverage manufacturing
Goals achieved: Lower costs, Greater flexibility, Additional leverage
A long-term operator in the food and beverage manufacturing industry wasn’t “feeling the love” from its existing chartered bank. Despite the businesses’ long history of steady, predictable profits and a tenured relationship with the existing lender, the owner did not feel like they were being offered competitive rates and terms. While many owners would find this surprising, in Lakepoint’s experience it is can be common for long-tenured relationships to result a level of in complacency on the lender’s side.
A business expansion that necessitated a large capital investment was on the horizon, so to ensure they were getting the best possible financing, Lakepoint was engaged after a referral from the businesses’ external accountant.
Over a few calls and meetings, Lakepoint got up to speed on understanding the business and the industry it operated in. With this knowledge in place, Lakepoint crafted a detailed, specific financing request that met the businesses’ specific current and future needs, including a pre-approved facility to acquire growth CAPEX.
The market agreed with Lakepoint’s assessment of the strength of the operator, and several strong offers were obtained through Lakepoint’s organized and robust procurement process. After some post-offer negotiations, the newly obtained financing package included the following wins:
· Nearly $40,000/year in interest savings
· Relaxed financial reporting requirements, saving an additional $5,000+/year
· A new annual partial prepayment provision for the businesses’ fixed-rate term loans, providing greater flexibility
· An increase to the business operating line of credit ($75,000 to $250,000)
· An additional pre-approved $500,000 facility for future CAPEX
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