The Customer
The customer is a food manufacturer facing margin pressures.
Challenge
- Customer concentration risk: The company derived approximately 80% of its total revenue from a single customer, exposing it to significant financial instability if that relationship weakened or ended.
- Margin compression: Increasing competition within the industry exerted downward pressure on profit margins, making it harder for the company to maintain healthy operating cash flow.
- Escalating leverage: Over the course of just 12 months, the company’s leverage ratio climbed from 3x to 5.5x EBITDA, triggering lender concern and complicating its ability to refinance existing obligations or secure growth capital.
Done Deal
- Structured $5.7M in strategic financing: FNC designed a customized $5.7 million solution tailored to the company’s capital needs, including early buyout flexibility to support future refinancing or ownership changes.
- 25% soft cost allowance: Financing covered not only equipment but also soft costs—up to 25%—including critical services such as shipping, installation, training, and customization, which are often difficult to finance conventionally.
- Path to diversification: The financing package delivered working capital runway, giving the company the breathing room it needed to invest in new customer relationships and reduce dependency on its largest client.
