Term Loan Keeps Production Lines Running

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Nº 011

Term Loan Keeps Production Lines Running

Financing Breakdown

Risks

The incumbent bank’s lack of runway would keep the company in default and push it toward bankruptcy.

Scenario

Turnaround

Industry |

Manufacturing

Key Challenges

Post-acquisition capital shortfall

Fraud and systems fixes

Holdbacks delaying cash

Loan Type

Term Loan

Outcomes

Working Capital Restored

Robust product demand meant additional working capital was required to deliver on promises to customers.

Bank Relationship Preserved

The operating line stayed in place, with a clear split and defined roles for each lender.

Lender Type

Private Credit

Bank

Result |

Working Capital Restored

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Overview

Term Loan Keeps the Lines Running

Diamond Willow arranged a $9 million senior term loan that unlocked working capital while the existing bank kept the operating line.

A first-time owner inherited hidden baggage after acquiring his company and was faced with a bank exit. Referred by a banker at another institution, he needed a fast, credible plan to keep the doors open. We repositioned the story around robust demand, tightened controls and reporting, and set a structure that funded production while the incumbent stayed on the operating line.

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The Challenges

Capital shortfall following the acquisition.
Discovered fraud, leadership issues, and missing systems.
Complex industry payment terms that delayed cash conversion.

Risk Mitigants

Robust industry demand for the product set.
New operating systems and management that improve reporting, invoicing, and margins.

The Outcome

With working capital restored the company was able to execute on its recovery plan. The bank relationship stayed intact, and the operating line remained in place with a division of security.