Bank Participation

Line of Credit Secured by Accounts Receivable

Producer of Thermal Management and Structural Products


THE SITUATION: Since its founding in 2004, this Company has rapidly become one of the world leaders of advanced thermal management materials and solutions for the electronics industry. Today, the Company produces thermal management and structural products for systems ranging from telecom satellites and military hardware, to high performance microprocessor assemblies and IGBT power conversion modules for traction and next generation hybrid and fuel cell vehicles. Revenue growth, driven by a foreign customer, resulted in the Company looking outside their current bank for a new banking relationship.

THE PROCESS: The Company approached their former banker to see if his new bank would be interested in providing the Company with a larger line. After reviewing the package, the banker approached Southeastern about the possibility of partnering to make the Loan structurally sound by the Banks’ standards. Due to prior losses coupled with foreign exposure to a customer, the Bank was unwilling to move forward without additional monitoring controls in place as well as credit insurance to cover the foreign exposure. So, because of the structure Southeastern brought to the facility, the Bank was comfortable in taking 50% of the loan. Southeastern would lead the credit and monitor the collateral with a 50% participation. 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, he was able to move the entire relationship and gain the 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.