| |
| Borrower | A struggling shoe manufacturer in Nashua, NH. | |
| Loan | A one-year loan of $1,300,000 at 15% | |
| Collateral | A first lien on seven acres and a 107,540 sq. ft. building. | |
| Guarantors | none, this was a non-recourse loan | |
| Purpose | The borrower was close to being acquired by another manufacturer. The combined manufacturing capacity would yield economies of scale. The loan was intended to supply working capital to keep the factory operating until the purchase was complete. | |
| Exit strategy | The loan was to be repaid as part of the purchase transaction. | |
| Outcome | Unfortunately the purchase did not close. The borrower filed for Chapter 11 after nine months, and our loan was purchased for 100% plus interest by the local bank, which had second liens on the collateral. |
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