11 Nov Bank Workout for Construction Company in CT
November 11, 2011
Worth Avenue Capital, LLC of Guilford, Connecticut recently completed a $1,000,000 bank work out for a construction company in Connecticut. The company maintains this $1,000,000 line of credit with a commercial bank in Connecticut.
Due to the lingering distressed economy and the tighter credit standards maintained by all the banks as well as operating in a high risk industry, this client had a very difficult time managing their banking relationship. The bank has been seeking full payment of the $1,000,000 line of credit from the client. Since the client’s cash flow is not as robust as it was in previous years, due to the economic downturn, the client was unable to fulfill the bank’s request for full payment. As a result of the client not being able to pay the loan back in full, the bank then asked the client to provide additional real estate collateral to secure the loan in full. Once retained, WAC was able to successfully negotiate a settlement with the bank in which the bank rescinded its demand for full payment on the loan as well as reduce the amount of collateral by approximately $500,000 that the bank originally sought from the client to secure the loan. WAC was able to salvage the client’s banking relationship without damaging the client’s credit standing or impairing both its short and long term cash flow requirements.
Please do not hesitate to call Worth Avenue Capital’s Principal, Michael Ciaburri, if your small business is in search of capital for either growth opportunities or debt restructurings. In addition, Worth Avenue Capital specializes in performing bank workouts for those same small businesses.