What We Do
Cash Flow Loans
Cash flow loans are a type of debt financing, generally for working capital, utilized by companies which have little in the way of hard assets, but they have a consistent stream of profits historically. The Lender would instead rely on the expected cash flows that a borrowing company generates as collateral for the loan.
To secure repayment, the Lender covenants a borrower on metrics such as enterprise value, EBITDA, total interest coverage ratio, total debt/EBITDA, etc. They will also take a charge over the assets of the business to provide the Lender with the ability to take control of the cash flows in the event of default.
Cash flow loans are usually senior term loans or can be structured as subordinated debt, being used for funding growth or financing an acquisition.
Asset-Based Loans (ABL)
Asset-based loans (ABL) cover a broad form of financing. These loans are routinely used to finance your accounts receivable and inventory, but in addition, we have lenders who can utilize property, plant and equipment (PP&E), real estate and intellectual property (IP) as collateral. If qualified, a lender which utilizes an SBA guarantee can participate, but if not, we have relationships with other more flexible options available such as banks and specialized lending firms.
A subsection of asset-based loans, called working capital loans or lines of credit, are capital facilities which are most typically secured by accounts receivable and inventory. The lender advances a percentage against the total dollar value in each asset category for the purpose of speeding up your cash cycle. The result to the business is increased cash flow which normally translates into improved operating health and growth for your business.
Invoice factoring helps companies that need working capital because their clients either do not have the cash or otherwise do not wish to pay cash upon receipt of merchandise, and therefore request payment terms, creating an account receivable. Instead of borrowing against your accounts receivable, the company sells them to a factor, which improves cash flow.
Purchase order financing helps manufacturers, distributors and re-sellers that need funds to pay their suppliers. Once your company has one or more purchase orders (PO’s) with a credit-worthy company(s) (this is earlier in the sales cycle than AR financing), a PO finance company will lend against that PO, and once the order is fulfilled and turns into a sale, the PO capital supplier gets paid.
Nexus Capital can assist in funding projects from $10 Million and up into the hundreds of millions of dollars, both in the US and abroad.
Depending on many factors such as size, location, economics, jobs created, equity available from sponsors, visibility, risk, sector, et al, we have many solutions in the Project Finance arena. We are active in alternative energy, oil and gas, real estate, and other sectors, and in various geographies.
Let us review your project, then we can share our thoughts on potential solutions, and costs of each potential alternative.
Mezzanine Debt (Junior Debt)
Subordinated debt (aka sub debt) and junior debt are generally loans that are second in position or rights to debt provided by senior lenders such as banks and other collateralized lenders. Mezzanine financing is a class of sub debt that gives the lender upside in the company’s valuation through rights to an obtain an equity interest in the company (usually warrants) under certain conditions.
While sub debt lenders often vary their parameters by a company’s financial performance, geography, amount of capital desired, leverage desired (multiple of EBITDA), coverage ratios, asset-based or cash flow focus, along with SBIC we have a great many assorted sub debt lenders seeking to put capital to work.
Merchant Cash Advance (MCA)
A Merchant Cash Advance (MCA) Program is well-suited for businesses that may not qualify for a traditional bank loan. By basing the funding amount for which you qualify on the average volume of your credit card or gross sales, the Merchant Cash Advance program allows the Lender to convert your future credit card receivables into the immediate capital you need today!
This program is usually well-suited for a variety of consumer-related businesses such as:
• Professional Medical Practices
• Auto Repair Shops
If funds are needed to expand, renovate, or simply reduce debt, quick access to capital can often make a significant positive impact to your business, allowing it to grow when it otherwise may not have. Let’s discuss whether an MCA Program can be the correct solution to your capital requirement issues.
The SBA does not provide grants or direct loans, instead, the SBA guarantees against default certain portions of business loans made by banks and other lenders that conform to its guidelines, allowing for lower interest rates than could otherwise be attained. Also, the SBA allows for longer terms and loosened criteria, often resulting in businesses being able to borrow more money than they otherwise could have borrowed. The following programs are available to our clients:
• 7(a) Loan Guarantee Program is designed to help small entrepreneurs start or expand their businesses, with a loan limit of $5 million.
• 504 Fixed Asset Financing Program provides funding for the purchase or construction of real estate and/or the purchase of business equipment/machinery. Of the total project costs, an applicant provides only approximately 10% of the financing, with $5 million in financing being the maximum ($5.5 million for manufacturers).
• Microloans are offered through non-profit microloan financial intermediaries, and are capped at $50,000.
We have relationships with many financial firms which are solely interested in making stock loans to insiders and other parties who wish to achieve some liquidity for various purposes, but still wish to retain the upside in the stock should the price rise.
No personal liability is involved in this transaction should the stock price fall… We are aware of strong interest in lending in against both domestic and International stocks in the major equity markets.
For private company owners who desire selling a controlling equity stake in their company for any of the following reasons:
• Partnership Dissolution
• Estate Planning
• Need to De-lever
Management Buyouts (MBO)
Have you considered buying the company for which you work? A Management Buyout, or MBO, is a great way for company ownership to transfer from an owner who is interested in diversifying his/her assets, or is considering retirement to the managers who have helped build the company and maintain many of the relationships responsible for a lot of the value creation. Managers don’t need to have all of the cash or equity necessary to effect a transaction. Nexus can assist in identifying the necessary debt capital, as well as equity capital, while carving out a healthy slice for company managers who can either buy in, earn an equity carry at closing, and/or can obtain performance-based warrants which could further increase their stake going forward.
We have very many equity-focused investment companies which are in the business of investing in private companies just like yours.
Whether your company is public or private, sometimes equity is the best source of capital for growth or various restructuring interests, depending on many factors such as revenues and profitability, valuation of the company and appetite for dilution, access to debt capital, among other factors. Our institutional investors often specialize in either the public markets, or the private equity arena, although some do both.CONTACT US
Real Estate Financing
Real Estate Debt
Nexus Capital can provide senior debt capital to sponsors of real estate projects in situations where banks can’t get the job done due to a number of factors which may be less material to our lenders. We also have subordinated debt lenders who are actively seeking to employ capital into worthy real estate projects. Our capital sources are interested in most property types, including raw land. LTV’s 50%-80%, and better if equity or additional upside is available to the lender.CONTACT US
Real Estate Equity
Nexus Capital has real estate equity solutions as well, either offering sponsors capital representing a minority piece of equity necessary to round out the capital stack, or maybe bringing a large majority of the equity capital required, or even all of the equity requirements from a group which would then offer a carried interest to the sponsor, or simply compensate the sponsor with a strong, immediate developer fee.CONTACT US