Business Capital Secures Term Loan for Sitka Trucking
Our Client, Sitka Trucking and its affiliate Big Buck Trucking, was established in 2013 and is a top 10 FedEx route contractor out of approximately 12,000 in the U.S. The Company, based in Northern California, operates predominantly Linehaul routes, picking up trailers and delivering loads to designated terminals nationwide. These routes are permanent, owned by our client and can be sold or assigned to a third party. It also owns a vehicle repair company which services a variety of fleets for private and public businesses, as well as government agencies.
Sitka had experienced exponential revenue growth with the acquisition of new routes over a short period of time, as well as shedding less profitable routes in order to improve operating cash flow. FedEx routes are bought and sold in an active secondary market, which is highly competitive with many existing operators bidding for these routes. In order to acquire these profitable routes, Sikta had to take on expensive debt financing and provide sellers with advantageous terms. This caused cash flows and profitability to decline based on increased cost of financing and large seller note payment maturities. The Company was seeking a $3.5MM term loan to refinance this high yield debt and provide longer amortization in order to benefit cash flows.
Due to BizCap’s extensive experience in the transportation industries and debt capital markets, the team was able to structure and deliver an affordable SBA term loan that would allow the Company significant savings from the previous high interest financing and also provide incremental working capital for continued growth.