Line of Credit Secured by AR and Inventory

Manufacturer of components for the bedding industry


THE SITUATION: Started in 2008, the Company designs and manufactures some of the most innovative foundations for the bedding industry. With nearly a million square feet of space available at their manufacturing facility, the Company’s team of engineers design, adjust, and create prototypes to fit the exact specifications of the foundation of consumer’s dreams. Their customer base includes some of the world’s largest companies in the bedding industry. Since the Company’s inception in 2008, one customer made up the majority of the Company’s revenue and was the main driving force behind the Company’s rapid growth. In 2013, this large customer merged with another competitor. The Company expected their business to continue to grow especially with the combination of two bedding giants. However, in 2016, new management at the combined Company began increasing imports of foundations from Asia. This caused a dramatic drop in revenue and profitability. This resulted in the Company being put into special assets at their current lender.

THE PROCESS: Having been a former customer of Southeastern, the Company reached out to SECF to gauge it’s interest in partnering with the Company again for their working capital needs. After numerous meeting with the Company, Southeastern felt confident in the Company’s turnaround plan and management’s ability to execute that plan. In looking for a new banking partner, Southeastern introduced the Company to a local community bank. After meeting with the Company and Southeastern, the bank felt comfortable moving forward with Southeastern from a participation standpoint. Southeastern would lead the credit and monitor the collateral (daily/weekly) while the Bank would control the relationship and through their participation, provide more competitive blended pricing for the Company.

THE RESULT: The Bank was able to gain a new banking relationship and benefit from all the additional cash management and lending opportunities it might present in the future. Southeastern was able to help a former customer during a time of need and structure a facility that enabled the Company to continue to execute its turnaround plan.