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BDO USA, LLP announced that Brent Worthy recently joined the firm’s Business Restructuring and Turnaround Services practice, with a primary focus on covering the Southwest regional markets. Worthy, a seasoned leader in the management consulting space, has more than 15 years of experience creating and preserving value for organizations through corporate restructuring, M&A strategy and execution, and digital finance transformation.

Under Section 1106 of the CARES Act, Paycheck Protection Program (“PPP”) loans can be forgiven, in whole or part, under certain conditions.  The SBA has continued to release guidance with respect to the lender review process for loan forgiveness applications, most recently in the form of an Interim Final Rule published May 22, 2020. 

This new rule, the SBA Loan Review Procedures and Related Borrower and Lender Responsibilities (“Loan Review Process IFR”), provides important additional guidance with respect to a lender’s responsibilities for processing loan forgiveness applications in a timely and compliant manner.  The rule also describes the circumstances under which a lender may lose its processing fee, and potentially, the loan guaranty. 

While further guidance is expected, the Loan Review IFR outlines the general process for submission and processing of the loan forgiveness applications.

ForwardLine Financial, a leading provider of financing to small businesses, secures new credit facility from Ares Management.

ForwardLine Financial, a leading direct lender of small business loans, announced today that it has secured a new senior credit facility from funds managed by the Alternative Credit strategy of Ares Management. As part of this announcement, the company also shared that it has raised additional capital from Five Oceans Capital, a long-term investor in the company.

Corporate entities often turn to asset-based lending (ABL) as a strategic way to fund acquisitions, reduce capital volatility inherent in cash flow structures, or simply to accelerate growth. Secured by company assets, this alternative path to cash flow financing has historically followed the same process: companies choose a lending institution based on the most attractive deal structure, accept its deal terms, and undergo a field exam and asset appraisal to determine the appropriate borrowing terms.

The European Union’s recent passage of its Sustainability Financial Disclosure Regulation marks yet another milestone in the progression of environmental, social and governance matters. This article will review this regulation and related ESG disclosure requirements, together with other notable ESG developments, and discuss their impact on middle-market lenders.

Andy McGhee is vice chairman of White Oak Commercial Finance (White Oak), an affiliate of White Oak Global Advisors, LLC, and leads the firm’s lender finance business. He has over 30 years of experience in the lending business, most recently managing a multi-billion-dollar loan portfolio as the CEO of AloStar Capital Finance. In 2011, McGhee co-founded AloStar Capital Finance by acquiring a failed bank in Birmingham, AL.

At the time of its sale in 2017, AloStar had committed more than $3 billion to middle-market companies. McGhee has also served in various leadership roles covering asset-based lending (ABL) at SunTrust, Citicorp, Bank South and Bank of America. McGhee sits on the board of directors for Piedmont Hospital in Atlanta and is an Elder at Peachtree Presbyterian Church. He holds a B.A. in economics from the University of Georgia.

In response to the newly passed Paycheck Protection Program Flexibility Act, SFNet issued a letter to Treasury Secretary Mnuchin, SBA Administrator Carranza and Members of Congress reiterating its calls to make secured lenders and factors eligible as borrowers under the Paycheck Protection Program Interim Final Rule, noting that these institutions ”who are a critical conduit of capital flows for our economy are now facing material economic hardship, not only from reduced economic activity, but by the displacement of revenue streams due to the success of PPP!”

The data in this Annual Factoring Industry Survey presents results from a period that now seems like a distant memory. Sitting down to write commentary was very challenging. Commenting on the past year seemed moot; and attempting to correlate or speculate on the future of our industry seems a fools’ errand.

One thing to keep in mind is that receivables factoring is a an “all-seasons competitor” in the world of finance.  Factoring is a product that has been around for hundreds, if not thousands, of years, and so I am confident that it, like our economy, will weather the current stormy global conditions stemming from the pandemic. In fact, it is more likely that the industry will grow and thrive during this time of stress and uncertainty. The very design and nature of accounts receivable factoring is ideally suited for providing liquidity to businesses in times of financial, operational stress and uneven cash flow.

Financial analysis is a cornerstone for any credit administration function.  Each loan officer must know his or her borrowers and thorough financial analysis is the best way to start.

The goal of financial analysis is to link business events to changes in the balance sheet, income statement and cash flow to explain the company’s performance during the period under analysis.  Without this linkage you end up with “elevator analysis” (sales are up, AR is up, EBITDA is down, etc.) and no meaningful understanding of the company’s performance.

Where do you start?  EBITDA is often a starting point for many people.  Why?  It is a standard measure of performance in the banking and finance industry.  EBITDA is a measure of the profitability generated by a business before interest expense, tax expense and depreciation and amortization expense.  While this gives the analyst a place to start and some ability to compare to comparable companies, EBITDA should not be viewed as a proxy for cash generation ability. 

First Citizens Bank today announced that it has hired experienced banker Linda Stanley as a relationship manager in its Middle Market Banking business.

In this role, Stanley will be responsible for developing, maintaining and expanding client and prospect relationships in the middle market financing sector, where the bank is a leader.

Paragon 28, Inc. a market leading orthopedic medical device company focused exclusively on the foot and ankle, today announced that the Company has entered into a credit facility with MidCap Financial ("MidCap") providing Paragon 28 access up to $70 million in total credit.

J. Crew announced that its parent company, Chinos Holdings, had filed for Chapter 11 protection in federal bankruptcy court for the Eastern District of Virginia. As part of its financial reorganization plan, it will hand over control to top creditors, including the hedge fund Anchorage Capital, by converting $1.65 billion of its debt into equity. The company also plans to hold onto its Madewell brand, which it had considered spinning off into a public company.