A large, diversified construction company with annual revenues in excess of $9M has been serving Texas and surrounding states since 2005. Their customers include national homebuilders, custom homebuilders and general contractors. GFLS did a couple of small transactions including tele-handlers and a Vermeer Tractor. They had ordered a large polishing system to be used to polish stone and it was to be set up in a mining area. This system was ordered from a manufacturer in Italy.
Though we had approved this transaction, the applicant wanted a longer term than we could provide, a financing structure we could not offer, and of course a much lower rate. Everyone finally agreed to a structure and we moved forward. Once the lease was signed, we paid the vendor 100%. Then COVID hit, followed by supply chain bottlenecks disrupting getting the equipment to the US.
Since there was an equipment delivery delay, the customer wanted to explore for a lower cost of financing. We agreed to work with them and put in a position where we were at risk of losing financing. We worked very closely with our customers’ Finance Director to help them find a new source for the financing. They took it directly to their bank, with whom they had a long-term relationship and were declined. We worked with our syndications desk and was able to secure a Term Sheet for them. They were going to pass.
Ultimately, they felt comfortable with our documentation and process. They also felt we were on their side and working for them. This Lessee’s credit was not stellar and company had multiple LLCs set up due to the diversity of their businesses. Their goal was to have a lower monthly payment than what we could offer. Solution? If they could pay down the financing amount, we lengthen the term from 36 to 48 months, the new monthly payment could work. They agreed. They have been a wonderful Lessee to work with – a win-win for the both of us.
