CASE STUDY
The Client:
A family-owned, full-service inland marine company with over five decades of expertise stood as a trusted pillar in the marine services industry. Renowned for its high-quality ship repair, fabrication, harbor operations, and marine construction, the company had built a stellar reputation serving barge and towboat operations. Poised for expansion, the company aimed to acquire and refurbish critical assets—barge movers, freight barges, cranes, towboats, boom lifts, compressors, and lathes—to sustain its growth and uphold its legacy of excellence.
The Challenge:
The company faced a complex financial landscape that threatened to stall its ambitions. A looming balloon payment from a Main Street Loan Program (MSLP) demanded immediate liquidity, while tight debt service coverage ratios (DSCR) limited access to traditional bank financing. The primary bank, constrained by single-customer concentration limits and a conservative credit risk appetite, couldn’t provide a comprehensive credit facility. Additionally, the company needed to preserve existing banking relationships without agreeing to blanket liens or restrictive covenants. Balancing these constraints while funding critical asset acquisitions and ongoing operations required a creative and flexible solution.
Solution:
First National Capital stepped in as the architect of a $39 million financing package, orchestrating four tailored transactions to meet the company’s immediate and long-term needs. Through a strategic sale-leaseback of existing assets, First National refinanced the MSLP loan, improving DSCR and unlocking liquidity. An incremental line of credit was structured to fuel capital expenditures, enabling the acquisition and refurbishment of essential equipment like barges, cranes, and towboats. Each transaction was customized to the unique asset types, offering flexible terms, durations, and repayment schedules to align with operational goals. Leveraging deep marine sector expertise, First National ensured the solution avoided restrictive covenants, preserving the company’s banking relationships. The result was a comprehensive capital program that satisfied near-term obligations, enhanced liquidity, and empowered the company to invest in infrastructure for sustained growth, cementing its legacy in the marine industry.
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