Super G provided a $1.5 million working capital bridge facility to a provider of software as a service (SaaS) solutions. The company's platform provides data management solutions to insurance agencies, government agencies, hospitals and other healthcare organizations. The company’s service offering includes enrollment and network management, medical credential verification, continuous monitoring of provider data, and claims screening.
The company, which was not named, was in the process of raising a large strategic equity round and was seeking interim capital to support its continued growth as well as general working capital cushion to alleviate equity closing pressure. The company had an existing senior term loan with an affiliate of funds managed by Fortress Investment Group secured by the company’s intellectual property and all other business assets so traditional working capital solutions such as asset based lending/factoring were not an option due to seniority issues as well as insufficient borrowing base availability. Additionally, given the anticipated time horizon to a large equity raise, the Company preferred non-dilutive capital versus convertible note/shareholder equity options.
Super G was able to work closely with Fortress to provide a $1.5 million structured working capital solution by carving out specific contracts as collateral and lending against the annual value of those contracts (i.e. Super G was senior secured on specific contracts and second lien on all other assets). This allowed the company to have much more access to cash immediately then they could with a traditional asset based lender. This unique structure combined with non-dilutive capital were the key points of difference when the company made its bridge financing decision. In addition to the contract collateral, the key underwriting criteria for this deal was the company’s unique software offering, the management team, customer stickiness, and ability to service Super G’s debt through operational cash flow in the event an equity raise does not occur.