April 3, 2023

Haversine Provides Factor with Financing to Accommodate Growth

Are you looking for a funding partner to bolster your existing financing so that you can take on new business and expand your portfolio? Read more here about how Haversine helped this funding.

Haversine Funding specializes in helping asset-based lenders, factors and other finance companies fill funding gaps by providing our clients with flexible and competitive funding solutions. Through our three primary product offerings – participations, junior and senior lines of credit, we are able to provide clients with funding to achieve their goals for growing their funding platforms.  

Are you looking for a funding partner to bolster your existing financing so that you can take on new business and expand your portfolio? If you have an existing senior secured bank line of credit, a junior line of credit through Haversine might be the best option for additional liquidity.

Take a look at how one factoring company was able to expand their portfolio with a junior line of credit from Haversine, and then see how we structure our junior capital product offering to work in tandem with your existing senior bank lender.

Quick Overview: Growing Factor Seeking Additional Capital

In early 2021, Haversine Funding provided a junior secured lender finance facility to a factoring company that serves the staffing and janitorial industries. The factor had a senior secured bank line of credit but needed additional support in excess of the bank’s advance rate. With the additional liquidity provided by Haversine, the factor was able to double its portfolio over the past year and build a pipeline for 2022. Both Haversine and the senior bank lender increased their respective facilities to accommodate the growth, with Haversine increasing its junior secured facility from $1.5 million to $3.5 million.

Haversine was able to help, working through the increase so the owners could continue focusing on expanding the team, originating new deals, and managing risk, not having to worry about continuously raising capital. Additionally, Haversine was able to introduce them to other bank lender finance groups that could provide larger lines of credit at more competitive rates, creating more profitability for the business.

Loan Structure:
Line: $3,500,000
Type: Revolver
Product: Junior Secured Capital

Product Overview: Junior Secured Capital

How does the Haversine junior secured debt facility work? Unlike most other forms of junior capital or traditional subordinated debt, the Haversine junior credit facility is not a term loan. Rather, the Haversine junior line is revolving in nature, tied directly to the eligibility of the underlying collateral. As such, relative to most other forms of junior debt or traditional forms of subordinated debt, this Haversine product provides greater flexibility for factors and lenders to manage their cost of funds, only paying for the funds they need – and that they actually use.  

As a revolving credit facility, the Haversine facility allows growing factors and lenders to fill the funding gap between the eligible advances to clients and the advance rate provided against that collateral by the senior secured lender. Generally, the senior lender funds 75% to 85%. The Haversine formula effectively increases this availability by 10% to 20% on a junior secured basis, often giving up to 95% of what's been advanced to clients, with the owners of the business carrying the difference directly through equity and continued earnings.

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