Need: Equipment Lease Buyback
This company had acquired an SBA loan and used it to purchase equipment. They also need to relocate their operations to a different facility. They were capped out with their current lender for any additional funding. A lease buyback program was used to restructure the equipment creating leverage and provided a full tax benefit.
ABOUT THE COMPANY
HQ Location: Tennessee
In Business For: less than 2 years
Annual Revenues: $3M
Customer Base: Domestic, Commercial Clients
> Restructure their equipment purchase to enable the ability to take advantage of a Real Estate loan.
> Real Estate purchase of new facility.
> Leap Kapital brought to them a lender that specializes in lease buyback programs which could restructure the way the SBA loan had been used. This would have the potential to move the equipment off the balance sheet to create a financial structure that increases leverage and creates a full tax benefit position.
> By coordinating with local Industrial/Economic Development, this company was able to receive incentives for relocation into a local industrial park. Overhead cost savings will enable a strategy that includes an equipment lease, and long term debt for the badly needed Real Estate.
By restructuring debt, leverage coud be created that enabled the company to expand by aquiring their own factory space with a long term strategy. In addition, the equipment lease would expand as market growth required.