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1st Commercial Credit Closes Merger, Acquisition, Including Equipment Sale-Leaseback

May 04, 2020, 07:05 AM
Related: Sale Leaseback

1st Commercial Credit closed on a $750,000 accounts receivable financing facility involving a merger and acquisition finance transaction of a metal fabricator. The factory specializes in metal forming using large hydraulic presses and manufactures industrial storage metal racks for several industries, including military, tire, auto, agriculture and some construction applications.

The client (buyer) after being declined by another factoring company called 1st Commercial Credit and asked if it could take over his request and help him complete the acquisition. The company quickly gave the client a term sheet, no upfront fees to begin; nor did it charge any fees after the funding. This was a very simple process since 1st Commercial Credit has done several merger and acquisition deals like this in the past.

The client already had a letter of intent with the seller and they entered into a Stock Purchase Agreement. There was a bank line of credit and equipment term loans to take out by paying off the bank. The transaction required an accounts receivable finance agreement to take out the accounts receivable balance. 1st Commercial Credit obtained an equipment lease company to purchase the equipment under a sale lease back, pay off the bank on the equipment portion and create a new lease agreement with the updated new ownership. The seller agreed for the remaining balance to finance a note for the buyer to be paid over time and rented the property to the new ownership.

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