When Growth Needs More Than a Bigger Bank Line

The Opportunity

An established transportation factoring company was experiencing significant growth, driven by increased demand from existing clients and new business opportunities. With an experienced management team, a growing portfolio and a strong relationship with its senior bank lender, the company was well positioned for expansion. But growth requires capital. As the factoring portfolio expanded, the company needed a larger senior credit facility, along with additional supporting capital to maintain its borrowing structure and meet the bank's leverage requirements.

The Challenge

The company's senior bank lender was supportive of its growth and expanded its credit facility. However, increasing the senior line was only part of the equation. The shareholders initially provided additional capital to help bridge the funding gap. As the company continued expanding, management wanted a more scalable solution that would allow it to support growth without relying solely on additional shareholder contributions.

Haversine's Solution

Recently, Haversine Funding partnered with the factor and its existing bank lender to provide an $8 million secured, subordinated revolving line of credit designed to complement the senior bank facility. Haversine’s junior facility was structured around the company's eligible factoring portfolio, providing additional financing capacity behind the bank while preserving the existing senior lending relationship. As the portfolio continued to grow quickly alongside an industry rebound, Haversine expanded its commitment to $12 million, providing additional capital capacity to support the company's evolving needs.

The Results

With a larger senior facility and Haversine's flexible junior capital in place, the company continued expanding its factoring platform. The result was more than additional borrowing capacity. The company gained a scalable capital structure designed to support continued growth, manage leverage requirements, and reduce the need for ongoing shareholder capital contributions or equity raises in the future. For Haversine, this is exactly where junior lender finance can make a difference: working alongside established bank partners to help specialty lenders take advantage of growth opportunities.