Debt Restructuring for Multigenerational Company 

Challenge

GrowthLab was connected with an older multigenerational company that sells, installs, and services a key part for residential and commercial properties. When they came to GrowthLab they needed our help with restructuring their debt, as well as greater cash control and visibility. They were financed over the prior 6-months via mezzanine debt and they began to explore the options offered to refinance all of this debt. Lastly, they needed to gain clarity into some of the accounting data and their numbers.

Solution

GrowthLab initially began with a focus on refinancing and restructuring the debt by wo rking with the leadership team, the in-house accountant, and the customers banking contacts. GrowthLab introduced the company’s team to new banking relationships where they got multiple offerings from different banks on a refinance and restructuring scenario. After the company chose an offering, they worked with them to forecast pay down into their monthly and annual cash projections. GrowthLab worked with the selected bank to process the refinancing including gathering all documents, preparing all statements, and going to banker meetings to help answer questions about any financials. GrowthLab used cash flow forecasting models to project debt service coverage ratios in order to continuously stay in compliance while also having a greater eye towards cash movements.

Results

After working with GrowthLab, the company was able to refinance and restructure existing debt into a scenario that made sense, saved money on interest, and gave breathing room to cash flows allowing the company to grow once again.

Following the closing of the refinance, the company has stabilized and our efforts with them have transitioned to more operational strategy. We have been able to focus on the optimization of internal workflows, processes, and staffing to continuously increase efficiency and free cash flow. 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.