Valcom Inc (fka VLCO)

[nagoya1]

It seems that VLCO could be interested in

http://www.coletaylor.com/abl-faqs#IV

WHAT IS ASSET BASED LENDING?
An asset-based loan is secured/collateralized by a company's accounts receivable, inventory, equipment, and/or real estate. The lender takes a first priority security interest (Senior Position aka Senior Debt Financing) in the assets being financed. A specialized method of providing structured working capital and term loans that are secured by accounts receivable, inventory, machinery, equipment and/or real estate. Advance of funds are based on a percentage of the eligible accounts receivable. When AR & INV convert to cash the advances are re-paid accordingly.

An ABL is typically comprised of a revolving line of credit that does not have a typical structured repayment plan and is on an interest-only basis. CTBC will advance funds on eligible accounts receivable-up to 85% and eligible inventory-up to 60%. Higher advance rates are available based upon appraisal and to meet seasonal needs.

Senior Debt may also include an asset-based term loan secured with machinery and equipment. CTBC term loans are based on appraised value of M&E, and appraised fair market value of real estate and capital expenditure facilities to finance new equipment. CTBC’s term loans include regular periodic payments of both principal and interest in order to repay the debt at a set maturity date. ABL loans using real estate as collateral usually have longer maturities than M&E loans because M&E typically have a shorter economic life expectancy compared to RE. CTBC’s M&E loans can be amortized up to 7 years and RE up to 15 years.

CTBC also offers senior stretch facilities that will include cash flow loans up to 25% of the total facility. The cash flow loan is supported by sufficient cash flow to repay principal, generally within 24 months.

Loan Commitments=$5MM-$50MM (Syndication up to $100MM)
Company Sales=$25MM-$500MM
Interest Rates-Based on Prime and LIBOR.

Click here to see our lending parameters.

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II. WHAT ARE THE USES OF ASSET BASED LENDING?
Working Capital - The assets available to apply to a business' operations are considered working capital assets. At times, working capital loans are needed to bridge financial gaps during the lifecycle of a business. Working capital loans can be secured by a variety of asset types, including accounts receivable, inventory, equipment, and/or real estate.
Merger & Acquisition - To grow a business; a company may look to acquire a strategic partner or even a competitor. Asset-based financing is often an efficient means to obtain funding for business acquisitions.
Capital Expenditures - Capital expenditure is the money spent to acquire and/or upgrade physical assets such as buildings and machinery. Capital expenditure is also commonly referred to as capital spending or capital expense.
Growth - Typically, as a company grows so does its need for financing. Also, as a company's collateral grows, its assets can strengthen its ability to borrow. An experienced and creative asset-based lender can assemble a credit facility that can scale to grow with a company.
Refinancing/Restructuring/Debt Consolidation - When a company enters or exits a growth stage; refinancing or restructured financing may be key to creating a capital structure that better meets the needs of the company. This type of financing is often used for market expansion, completing an acquisition, restructuring operations, or following a successful corporate turnaround.
Dividend Recapitalizations - Recapitalization is the process of fundamentally revising a company's capital structure. A leveraged recapitalization typically is achieved by taking on a material amount of debt, the company increases its ongoing interest obligation but is able to pay its shareholders a special dividend. CTBC has extensive experience guiding businesses through the stages of recapitalization.
Turnarounds - Turnaround financing is often used by under-performing businesses that are not achieving their full potential. Asset-based lenders are accustomed to this scenario and asset-based financing is ideal for turnarounds because of its flexibility.
Buyouts - A buyout is the purchase of a controlling percentage of a company's stock. In a leveraged buyout (LBO), the acquiring company uses the minimum amount of equity to purchase the target company. The target company's assets are used as collateral for debt, and its cash flow is used to retire debt accrued by the buyer to acquire the company. A management buyout (MBO) is an LBO led by the existing management of a company. Most LBOs are also MBOs.
Leveraged ESOP (Employee Stock Ownership Plan) - A leveraged ESOP allows a company to raise its capital-to-asset ratio by issuing new shares of stock to an employee trust, which finances the transaction with an asset-based loan. The ESOP loan is repaid in pre-tax corporate dollars, and dividend payments to employees as well as the dividends reducing the bank loan are tax-deductible expenses. ESOPs may provide new capital for expansion or capital improvements, to buy out the stock of a retiring owner, divest a division, make acquisitions, and buy back publicly traded stock.
Debtor-in-Possession Financing - Debtor-in-possession (DIP) refers to a company that has filed for protection under Chapter XI of the Federal Bankruptcy Code and has been permitted by the bankruptcy court to continue its operations to implement a formal reorganization. A DIP company can still obtain loans, but only with bankruptcy court approval. Asset-based lenders also provide exit financing or confirmation financing to companies coming out of bankruptcy.

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III. WHO USES ASSET BASED LENDING?
Manufacturers
Distributors
Cyclical Companies
Selected Service Companies
Retail- Regional and national store-based retail chains and some internet-based retailers
Working-capital-intensive companies
High quality asset-rich companies
Seasonal or cyclical companies
Companies undergoing turnarounds
Retail-based companies
Financial sponsors looking for acquisitions
Private equity funds looking to assist their portfolio companies
Companies that have out-grown their current lender
Companies that have moderate to high financial leverage
Companies that have inconsistent profitability
Companies seeking to expand their business into new markets
Companies looking to grow their business but may not have the adequate sales or assets
Companies with an actively involved management team and or board that want to increase their equity
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IV. WHAT ARE THE BENEFITS OF ASSET BASED LENDING?
Versatile - Asset based lending provides immediate and on-going cash flow that can be used to buy materials and supplies, meet seasonal demands, meet payroll and operating expenses, and keep payables current, just to name a few.
No Excessive Reporting - Typically ABL lenders require a very minimal amount of reports such as a monthly aging of AR & INV. Of course each loan is unique so reporting is tailored to each individual loan.
Liquidity - Asset-rich borrowers can leverage more liquidity than typical lending allows.
Limit Interest Expense - Efficient borrowing mechanics, which allow for pay down and re-borrowing of funds when needed, you only pay interest on your outstanding loan balance.
Fewer Covenants - Less reliant on borrowers operating performance, therefore requires fewer financial covenants.
Higher Lender Tolerance - Asset based lenders have collateral to secure its loans and may be more willing to work with s borrower during times of financial difficulty.
Motivation to collect AR quicker - ABL advance rates are based on current eligible AR thus motivating borrowers to collect AR quicker. There is also a motivation to increase efficiency of production processes, which reduces WIP, and reduce ineligible collateral, thus increasing liquidity.
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V. WHY USE COLE TAYLOR BUSINESS CAPITAL?
Experience - CTBC has one of the most seasoned and knowledgeable ABL teams covering the US from coast to coast.
Industry knowledge - CTBC lenders have a deep understanding of how to turn assets into captial - in your industry. Click here to see recently funded deals.
Click here to read what our customers say about us.


A. WHAT IS AN ASSET BASED LOAN?
An asset-based loan is secured/collateralized by a company's accounts receivable, inventory, equipment, and/or real estate. The lender takes a first priority security interest (Senior Position aka Senior Debt Financing) in the assets being financed. A specialized method of providing structured working capital and term loans that are secured by accounts receivable, inventory, machinery, equipment and/or real estate. This type of funding is great for start-up companies, refinancing existing loans, financing growth, mergers and acquisitions, and management buy-outs (MBOs) and leveraged buy-out (LBOs).



Taylor Capital Group, Inc. is a bank holding company with its Operations Center at Rosemont, Illinois, a suburb of Chicago. Taylor Capital Group, Inc. derives virtually all of its revenue from its subsidiary, ColeTaylorBank, the sixth* largest commercial bank headquartered in the Chicago metropolitan area based on assets.

Taylor Capital Group, Inc. focuses on closely-held businesses and the people who own and manage them. The company provides a range of products and services concentrated in the areas of commercial banking, asset-based lending, commercial real estate lending, residential mortgage lending and personal banking. Taylor Capital Group, Inc. currently operates nine banking centers throughout the Chicago metropolitan area and its operations extend to many states across the country.



This is in my opinion, and I have no proof, but looking at the situation that Vinny is in, this could be a solution to this mess.imo
GLTA