We have been asked on several occasions to give an example of different thinking around helping companies with their financing needs either new money or a refinance of existing debt.
In this example we have highlighted the benefits, of a refinance. All situations are different, and this example is for illustration purposes only.
In our example, equipment was refinanced by firstly confirming the current market value versus the depreciated cost shown on the financial statements. The result allowed for an increase in company’s term loan debt, which in turn, provided the company with a much needed working capital injection of $370,000.
With the restructure, monthly payments on the term debt were reduced by $18,187 per month improving cash flow and amortization was extended on a new 5-year term loan. Given the nature of the business, principal payments were waived during the months of January, February & March and added to the end of the loan. While interest costs were paid monthly, principal payments were required from April to December inclusive.
Sometimes all you need is a second opinion on your financing. Over the years, we have looked at a number of deals in a number of industries so our service comes with a great deal of experience. We can help! We would like your feedback. Was this helpful? Have a look at our website! Give us a call, or email us as shown below! At Labrecque Business Consulting, we have a passion for business and a desire to help!
Business Finance Consultant