School Transportation Provider
Founded in the 1950’s, this privately-held transportation company specializes in moving passengers, mainly school-aged children, in the Northeast US. In addition to the main student transportation company, they operate a couple of affiliate passenger transportation entities.
They have long-term contracts with many private schools and public-school districts and have steadily grown their customer base. Their growth required the acquisition of additional buses to operate a fleet of over 800 units.
As the company and fleet grew, they needed to address a tax liability to assure continued growth. At the end of 2017, their tax liability totaled more than $4 million. Additionally, they owed a couple of equipment lenders over $400,000, one of which had an impending balloon payment. These obligations jeopardized everything they had worked so hard to build.
However, the company had several positive things going for them. First, it had an abundance of equity in its existing fleet to use as loan collateral. Second, the company has several large, long-term contracts to demonstrate a guaranteed revenue stream. The new equipment loan would not be new debt, but would allow them to pay off the IRS, eliminate several existing lenders, streamline monthly payments and improve cash flow.
They needed a lender that would:
CCG structured a loan that accomplished the following: