Full-Service Commercial Mechanical Contractor

Business Capital Structures and Secures a $6.5 Million Multi-Tranche Credit Facility for Mechanical Contractor Providing a Wide Range of Services for Commercial Clients.

The Client

The Company, established in 1949, is a family-owned mechanical contractor delivering full design, construction, fabrication and maintenance services for complex plumbing, piping and HVAC systems. Multi-million dollar projects have included renovations and expansions for large hotels and hospitals and hundreds of smaller jobs that require commercial plumbing and HVAC services. The company also works on public projects, including the installation of complex mechanical systems for one of the California Department of Transportation’s (Caltrans) largest current projects. With over 250 employees, the company generates well over $50 million in annual revenue.

“Our client was fatigued with the delays and lack of traction they were seeing in the credit market. The BizCap team is totally customer focused with the marketplace knowledge and resourcefulness vital to position our client for success. Working with urgency and purpose, we delivered the most competitively priced (5%), intelligently structured financial solution at a critical juncture.”

— Chuck Doyle, Managing Director, Business Capital

 The Situation

The Company experienced a cash flow shortage after the economic downturn, which adversely affected the construction market, worsened by taking on a large, unprofitable project during that time. The Company proceeded to blow through their bank covenants, was placed in the special assets department of the bank and instructed to find a new lender quickly or start liquidating assets to pay off the loans. Even if their incumbent lender was agreeable to them staying, the terms of the Company’s existing line of credit did not provide the company with the flexibility or full banking relationship needed to recover quickly.Because of The Company’s thin margins it was critical we deliver conventional financing at an all- in interest rate of about 5%. Securing bank financing for a contractor in their bank’s special assets department, with progress billing, retention and other contractor-related issues is certainly challenging.

 The Solution

Business Capital was referred in by a bank the Company was interviewing when they were declined again. Business Capital was able to understand and articulate the company’s industry and specific situation to targeted out-of-the-box, hard to find lending sources and structure a customized, affordable working capital credit facility. This will provide the Company the liquidity needed to take advantage of new business opportunities and future growth.


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