Flatbay Capital lends $1.7MM to a Houston, Texas-based provider of private fiber-optic connections to cities, municipalities, and educational institutions across the state. The commercial real estate loan was secured by an owner-occupied light industrial building whose main use is a data center.
The Situation?
Our client, referred to us by a banker, stood out from typical referrals due to their substantial positive cash flow. The issue with this particular client was leverage from an eight-figure enterprise value loan, given by the lending arm of a private credit fund. It was this new loan that led to leverage covenant violations at their existing bank. With no choice but to exit, the bank called on Flatbay Capital to help with the takeout of their owner-occupied commercial real estate loan.
A High-Speed Solution!
The fiber internet company chose to restructure the business by strategically expanding into locations where they have experience and partnerships providing services instead of exclusively focusing on partnerships with major national providers. This approach enables the client to build upon their strengths and establish a more extensive business network. By shifting its focus towards this highly diversified client base, the company is able to reduce its client concentration and therefore simultaneously de-risk and grow the business. The bridge loan funded will pay off the current banknote, with Flatbay Capital taking a 1st lien deed of trust.
The borrower will become eligible for financing with a mainstream commercial bank in the future when leverage is reduced either by a debt-to-equity conversion or a reduction in the principal of the enterprise value loan.
“This deal would not have been made possible without our referring bank partner. We are impressed by this business owner's strong company management and extensive business network. Though we are able to assist the company during a time of need, we anticipate our client company will soon return to conventional bank financing.” ~ Ethan Clasen
Flatbay specializes in non-bank commercial real estate loans/lines $1MM+ secured with owner-occupied commercial real estate.
Real Term Sheets + Competitive Terms + No DSC Requirements
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