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PNC Bank Inks $6MM Credit Facility with CCA Industries

February 12, 2018, 07:15 AM
Filed Under: Consumer Products
Related: PNC Bank

CCA Industries, Inc announced that it entered into a new credit facility with PNC Bank  to pay off the Company's existing debt with CNH Finance Fund I, L.P., formerly known as SCM Specialty Finance Opportunities Fund, L.P.,  and for general working capital purposes.

The credit facility provides a term loan in an amount of $1,500,000 and a revolving loan up to a maximum of $4,500,000.

The Term Loan is payable in consecutive monthly installments of $31,250 commencing March 1, 2018 and bears interest, at the election of the Company, at either the PNC base rate plus 1% or 30, 60 or 90 day LIBOR rate plus 3.50%.  All outstanding amounts under the Revolving Loan bear interest, at the election of the Company, at either the PNC base rate plus 0.25% or 30, 60 or 90 day LIBOR rate plus 2.75%, payable monthly in arrears.

The commitment under the Credit Agreement is for three years and expires February 5, 2021. The Loans and all other amounts due and owing under the Credit Agreement and related documents are secured by a first priority perfected security interest in, and lien on, substantially all of the assets of the Company.

Amounts available for borrowing under the Revolving Loan equal the lesser of the Borrowing Base (as defined below), and $4,500,000, in each case, as the same is reduced by the aggregate principal amount outstanding under the Revolving Loan. "Borrowing Base" under the Loan Agreement means, generally, the amount equal to (i) 85% of the Company's eligible accounts receivable, plus (ii) 65% of the value of eligible inventory, less (iii) certain reserves.

Lance Funston, the Company's Chairman of the Board commented, "The PNC credit facility validates our continued efforts to build a solid base for future growth.  We have demonstrated that through posting seven consecutive quarters of profits.  This facility, combined with a recent infusion of equity from Preservation Capital Solutions, LLC, will enable the Company to focus on growing the top line sales.  We are delighted to have this relationship with PNC Bank, the sixth largest bank in the United States, and to have their support."  Lance Funston controls Preservation Capital Solutions, LLC.

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