Bank Participation

Line of Credit Secured by AR and Inventory Seafood Importer

North Carolina

THE SITUATION: The Company began operations in March of 2015. For decades, the principal and his family ran a successful seafood restaurant chain with locations in North and South Carolina. As sales of these restaurants began to decline due to the change in eating habits by consumers, the principal of the Company began looking at his options. Due to his experience as a buyer in the international seafood markets, the principal started a new company in 2015 that imported seafood primarily from Asia and Argentina. After funding working capital with shareholder debt and a bank line of credit, the Company was looking to increase their current line to handle expected growth in 2018 and beyond.

THE PROCESS: The Company approached their current bank about increasing their line of credit due to expected growth and seasonality of the business. Despite being profitable, the Bank was hesitant to increase their current line by the requested amount due to the rapid growth of the Company, customer concentration, and increasing leverage. The Bank approached Southeastern about the possibility of partnering to make the Loan structurally sound by the Banks’ standards. The Bank was comfortable in taking 50% of the loan. Southeastern would lead the credit and monitor the collateral with a 50% participation while the Bank would control the relationship and through their participation, provide more competitive blended pricing for the Company.

THE RESULT: Due to the Banker providing a solution to their client, the Banker was able to keep the Company’s depository relationship including treasury management services. The Banker will keep an eye on the Company’s progress with the intent of graduating the line back into the Bank after the Company stabilizes and is less reliant on the line to fund daily operations. The result was a win for all parties involved.