CUSTOMER:

The semiconductor company manufactures analog integrated circuits for more than 300 customers worldwide in growing markets such as consumer, automotive, medical, industrial, and aerospace & defense, among others.

CHALLENGE:

Customer had an approval with a global bank and after one portion of the $8.5 million project was near completion, the bank closed their division which was lending to this industry.  Pressure to close by year end to secure critical rebates and being forced to pay $2.5 million to fund the portion of project already completed, there was a huge strain on the cash flows and uncertainty of moving forward with remainder of the project.  The project has high soft cost components and a long build cycle that requires progress payments and complex project coordination.  Adding to the complexity, the finance term had to be long enough so the project could produce cash flow savings every year–not just in the aggregate.

DONE DEAL:

First National was able to complete $8.5MM in financing for the customer quickly and reimburse them $2.5 million for the portion of the project they already paid for. We worked closely with the vendor and engineering firm to structure our financing so that the customer would qualify for critical rebates–estimated at $1.67 million–as well as an additional net savings of a little more than $9.3 million over the 7 year term.   The collateral of plant fixtures are typically difficult to finance because most of their value is maintained only in an “in place – in use” scenario.   We were able to fund the construction and other soft cost as the project was being completed and bill the client for only the amounts outstanding.

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