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Republic Business Credit Provides $12.5MM Asset-Based Loan to Food Manufacturer and Distributor

February 07, 2024, 07:46 AM

In January 2024, Republic Business Credit financed a $9.0 million revolver and a $3.5 million real estate term loan for a family-owned, Illinois-based food manufacturing company.

The company, a specialty food manufacturer and distributor, sells its products to a variety of restaurants, specialty grocery stores and retailers throughout the country. It has been in business for more than 50 years and continues to grow, despite the various food supply chain challenges that have characterized the past few years in particular.

In 2023, the company experienced some minor cashflow struggles due to the rising costs of meat and supply chain issues that have affected so many businesses post-covid. Combined with slowing sales, attributable to a decrease in consumer spending across their categories, the company’s incumbent bank sought to refinance its loan after a more than 20-year relationship.
The company engaged KFK Advisors Managing Partner Kevin Kelly. Mr. Kelly is an established financial advisor and turnaround professional who helped the company with identifying refinancing options and sourcing competitive proposals. He referred the business owners to Republic as a trusted partner and a middle market asset-based lender. The process provided for a timely closing shortly after they had returned to positive performance.

“This company was demonstrating that it had the ability not only to recover, but to grow and retain its footing as an industry leader despite setbacks,” said Kelly. “I trusted Republic Business Credit to support the business and provide necessary liquidity after a challenging year.”

The company was tracking ahead of its turnaround plan and sought the right lender to support its success and plan for growth. Republic was proud to step in and be that partner, providing a $9 million asset-based revolver line of credit and $3.5 million real estate term loan that took into account the proforma performance of the business over last year.

Republic President Robert Myers said, “Our ability to underwrite, understand and correctly structure the proforma turnaround business plan makes us a great partner for middle market and lower middle market businesses across the food and beverage industry.”

“We were encouraged by their ability to increase sales while reducing overhead costs in a tough, competitive environment,” said Republic Senior Vice President, Business Development, William Kemp. “This company was ahead of plan throughout the underwriting process, which gave us even more confidence in its management team and turnaround consultant. We look forward to supporting their continued growth.”

Republic’s loan, totaling $12.5 million, provided not only the capital to refinance the current lender, but provided significantly more availability and the opportunity to fund an equity distribution. This provided necessary working capital support, providing the confidence to maintain its leadership within the market. With the increased resources and Republic’s support, the company is poised to exceed its 2024 goals.

“Republic is always proud to support entrepreneurial, family-owned businesses to emerge from recoverable distress,” Republic President Robert Meyers said. “We were glad that our lending solution enabled this company get back to focusing on the business, rather than the finances.”

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