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CIT Group Inc. (NYSE: CIT) today announced that its Asset-Based Lending business, working in conjunction with its Sponsor Finance group, served as lead arranger on senior secured credit facility for von Drehle Corporation, a leading maker of high quality paper towel, tissue and dispensing products.

von Drehle, headquartered in Hickory, North Carolina, used the proceeds to refinance debt and for general corporate purposes.

SLR Digital Finance LLC (“SLR Digital Finance”) announces the funding of an asset-based revolving credit facility for DeepIntent. The facility consists of a $40MM revolver with a sublimit for unbilled receivables.

As one of the pioneers in advertising technology for healthcare marketers, DeepIntent and its 220+ dedicated employees across four different countries have built a robust healthcare advertising platform that empowers marketers to plan, activate, and optimize their digital ad campaigns on a single platform.

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. 

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."

The author discusses the potential perils of improper use of “incorporation by reference” in commercial lending transactions, as well as potential strategies for reducing potential incorporation by reference hazards.

Cambridge Savings Bank (CSB), one of the oldest and largest community banks in Massachusetts, announced the addition of John Bobbin, First Vice President, Senior Asset-Based Lending Officer, to join its Asset-Based Lending Team, which sits under CSB’s well-established Corporate Banking division.

Encina Business Credit, LLC announced today that it has provided an $80 million senior secured revolving credit facility to a national distributor of media and consumer goods.

The senior secured revolving line of credit, which is collateralized by accounts receivable and inventory, was used to refinance the borrower’s existing facility and provide ongoing working capital financing.

As head of acquisitions, Bruce Sim is responsible for sourcing commercial finance platform companies and portfolios across North America, and the UK.

Sim has more than three decades of experience in commercial finance, banking, and capital markets. Prior to joining eCapital, he served as senior director of business development at ExWorks Capital, and senior managing director for Glass Ratner Advisory & Capital Group. His banking experience includes executive roles as Head of Capital Markets and Wealth Management at RBC (Caribbean) Ltd, a subsidiary of Royal Bank of Canada; Head of Wells Fargo Global Banking in Miami; and Southeast Region Manager for asset-based lending at Wells Fargo. Sim earned his Bachelor of Science (Mathematics) from the University of Toronto and a Master of Business Administration from York University in Canada.

Brooke Iley counsels and defends domestic and foreign corporations in all areas of employment and labor law compliance and litigation, including wrongful termination, discrimination, harassment, wage and hour class and collective actions, trade secret disputes and data protection, and alleged fiduciary breaches. She represents clients in negotiations, litigations, and arbitrations nationally in these areas.

Capstone Headwaters (“Capstone”), a leading middle market investment banking firm, announced it has completed the acquisition of Amherst Consulting LLC (“Amherst”) as part of a continued plan to grow the company’s Financial Advisory Services (“FAS”) group.

The announcement marks the latest development in a multiphase strategy Capstone unveiled this past December with the addition of several new FAS professionals based in various locations, including Denver and Canada. The newly acquired Amherst team will be led by Sheldon Stone and Scott Eisenberg who are joining Capstone’s FAS Group as Managing Directors and will continue to be based in Michigan.

Monroe Credit Advisors (“Monroe Credit”) announced that Marc Pressler has joined the firm as a Managing Director in its Chicago office. Marc will be responsible for originating middle market debt and lease transactions for the firm.

Marc has over 30 years of experience in commercial banking and structured finance. Prior to Monroe Credit, Marc was the Commercial Banking Segment Leader at Associated Bank, where he was responsible for leading the origination, underwriting and portfolio management teams in the Southeast Wisconsin region. 

While the PPP loans have provided necessary working capital for many businesses to survive the economic impacts of Covid-19, as those funds have been used and payment deferrals have expired, companies are looking to enter into M&A transactions. When a company has a PPP loan the M&A process is further complicated for the company and its lender.

On October 2, 2020 the SBA issued a Procedural Notice to provide guidance on the notification and consent requirements for changes in ownership of companies with PPP loans. The usual SBA 7(a) loan requirements are to obtain consent of the SBA prior to a lender approving a change in ownership. This October 2 guidance was meant to clarify what the SBA would expect specifically related to PPP loans and change of ownership.

As pandemic impacts continue to mitigate, many financial institutions are now reducing their risk forecast for loan defaults. The upbeat sentiments are welcome but the times remain unprecedented, and uncertainty remains on what lies ahead.

Today, more than ever, lenders are focused on minimizing their risks when entering a financial transaction.

Two key components in the lenders’ due diligence process when entering a transaction are conducting consensual and non-consensual lien searches and filing a UCC1 against the borrower.