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    Contact Blacksail Capital

    1 Toronto Street
    Toronto, ON M5C 2V6

    Telephone: 416.708.8746 (CANADA)
    Telephone: 512.710.6737 (US)
    Email: info@nextedgecf.com

    News & Blog

    News & Blog

    Highlights and Trends that can Benefit and Empower Business Growth

    February 18, 2021

    Highlights and Trends that can Benefit and Empower Business Growth

    Dear clients and partners,

    2020…. what a year!!!!

    Mostly lowlights instead of highlights. Our focus for this month’s commentary is on trends that we are seeing that could be of benefit to our audience. Over the last quarter of 2020 and during the first half of January 2021, we have noticed many companies requesting funding for the growth of their business. The general sentiment has been that as government support is drying up and the general malaise to fund by traditional sources, that small business needs access to capital to keep up with the demand for their goods and services. The silver lining in what is becoming a bottleneck for expansion is that there are many small businesses operating and doing quite well, but they are unable to keep pace with the demand for their product without expanding their existing operations.

    Blacksail Capital Partners (“Blacksail”), as part of the Garrington Group of Companies (“Garrington”), has built up a loan book exceeding $400 million focusing on the underserved small to mid-sized middle market sector providing working capital loans from $1 million to $25 million, which are generally secured by Accounts Receivable, Inventory, Machinery, Equipment, Secured Loans (Lender Finance) and Real Estate.

    Our current loan book is broadly diversified with exposure to approximately 200 Factoring, Asset-Based Lending, and Specialty Finance loans, with transactions in 32 States and 6 Provinces. Presently, the geographic weighting of the loan book is approximately 45% US and 55% Canada. Of these positions, over 150 are factoring positions or facilities, 35 are asset-based loans, and 12 are asset-based lender financial loans. Top regional exposures are in Ontario, New York, South Carolina, Illinois, Texas, British Columbia, Quebec, and North Dakota.

    We wanted to share with you a brief story that we see as a developing trend, on a business in growth mode that Blacksail was able to assist by financing their expansion plans. The facility that we recently closed on is a $12.5 million facility collateralized against receivables.

    Description of the transaction:

    A vehicle leasing and financing company (the “Company”) that offers loans/leases for on-road and recreational vehicles such as cars, trucks, motorcycles, snowmobiles, quads, and ATVs across Canada. The Company was seeking a facility against receivables to be used primarily for growth in the Maritimes and Quebec, to develop the Ontario market by means of acquisitions, and to start expansion into Manitoba. The subprime auto lending business is typically subject to fluctuations in part due to the current economic climate and to seasonality in December and January (holiday spending) and summer months (vacation spending). The Company needed further financing to bridge the gap between the ‘soft seasons’ and try to take advantage of the current opportunities in new markets for the Company (Ontario and Manitoba).

    The Company’s strengths are many, including strong tangible net worth, the profitability of the firm and a solid net present value in leases in the tens of millions of dollars. The two operating principals of the business started the Company in 2009 after having spent their careers in a traditional auto dealership and who then decided to branch out and start their own business. Fast forward to today, and the Company has over 4,000 leases on their book and has strategic partnerships in Quebec and the Maritimes with over 2,000 automotive dealerships that continue to grow. On a monthly basis, the Company sees in excess of 1,000 lease applications and approves close to 20% of the applicants.

    In closing, the effects from the pandemic in 2020 are spilling over into 2021, but there is light at the end of the tunnel and Blacksail is ready and present to help with your financing needs. We are currently seeking factoring, ABL, equipment finance, and lender finance opportunities. Our preferred loan size is $5 million to $25 million, but we will expand (both lower and higher) given the right circumstances.

     

    For more information on Blacksail Capital Partners, please contact us.

     

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