After recent insurance incidents resulted in losses, leading to bank credit denial, a crane operator had to find another lender that would work with them to fund a new all-terrain crane.
The customer required a new crane to take advantage of significant opportunities to expand its business. They placed an order for a new 300 ton All Terrain crane scheduled to be shipped in less than two weeks. When they approached their bank with this opportunity the bank refused to extend them additional credit based upon recent business losses resulting from two insurance claims asserted against the company. The company also approached the vendor’s finance affiliate for crane financing but was also rejected. The company needed help fast due to the imminent delivery of the equipment.
Initially the company was simply looking to fund their purchase of a 300 ton All Terrain crane at a cost of $1,820,000. But the company was also frustrated with their existing banking relationship. The bank had an existing term note with three cranes and a relationship that was deteriorating.
The company really needed a lender that would:
In meeting with the Company, CCG determined that the recent losses were not indicative of their long-term business history. CCG was able to offer an alternative transaction that would allow the company to complete the purchase of its new crane and refinance its existing equipment obligations. Furthermore, the recast of the existing loans would be cash flow neutral, and the equity in the existing equipment allowed for a lower down payment requirement for the new machine.
The new loan structure accomplished the following: