Food Distribution – TPO

The Customer

The company is a family-owned, food distribution business serving both local and regional customers to a wide variety of retail trade centers, restaurants, food processors, among others. As the company continues to grow, the customer was seeking $1.25MM in financing for the buildout of a cold storage freezer system for the purposes of expanding their distribution capabilities to better serve their existing customer base as well as new markets within the food distribution industry.

The Challenge

  • The Company was expanding into cold storage, a new venture and territory they thought would help grow their business and “provide one stop shop” service.
  • The collateral of a built-in refrigeration/cold storage system is typically difficult to finance because not only is it affixed to the property, but the project also contained a high percentage of construction and soft costs.
  • The project had a long build & construction cycle without a definitive timeline for completion which required progress payments over the course of the construction period.
  • The Company has fluctuations in their historical financials due to COVID, gas prices, and serving a volatile industry (restaurants and markets).
  • As a family-owned business, the customer did not have a substantial borrowing history, therefore finding a lender to provide the financing for the project became troublesome.

Done Deal.

  • First National was able to go deeper than the numbers and let the story make a difference, positioning the company to secure approval.
  • First National was able to fund with progress payments so the customer could preserve their cash.
  • First National recognized the character of the borrowers, time in business and experience and considered the intangibles with approval.

Business Cycle Volatility Case Studies

When economic winds or business cycles turn against your company and creative capital is needed to turn performance around, trust First National. Explore more case studies of companies facing these challenges by clicking below.

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