A heavy equipment dealer in the Northeast faced financial distress following post-pandemic market disruptions. Its operations were burdened by numerous equipment loans carrying heavy monthly amortization payments that its reduced operating cash flow could no longer sustain. The immediate goal was to stabilize the business and find a solution to relieve the pressure from its capital structure.
Cambridge Financial Services was retained to implement a two-pronged turnaround plan:
- Improve operational efficiency by implementing a targeted expense reduction plan and consolidating logistics and administration systems to immediately boost cash flow.
- Execute a complex debt overhaul by consolidating all existing secured equipment loans into a single, flexible Asset-Based Lending (ABL) revolving credit facility. This new structure was designed to drastically reduce the immediate debt service burden and provide sustainable liquidity.
The restructuring faced a significant hurdle when a prospective ABL lender, citing a couple of consecutive months of poor revenue, withdrew its commitment at the eleventh hour. This unexpected reversal led to immediate collection pressures from fatigued equipment creditors, threatening the viability of the business.
In a pivotal moment, Cambridge successfully solicited a second financial institution. Beacon Bank recognized the underlying strength of the Client Company and the strategic restructuring efforts performed. The bank engineered a revolving credit facility that not only satisfied all the outstanding equipment lenders but also ensured the Client Company had adequate working capital liquidity for future operations and growth.
Leadership Perspective
“Our team was retained to provide a quality, rapid response to an existential threat. This case is a perfect example of how focused operational restructuring creates the necessary foundation for success,” said Nicholas Jalowski, Lead Consultant on the engagement. “However, that foundation must be matched by a financial partner willing to look beyond simple metrics and embrace a shared vision for the company’s future. The partnership with Beacon Bank was indispensable.”
Ben Garcia, ABL relationship manager at Beacon Bank, added: “We saw this as an opportunity to support a key regional employer. By structuring a flexible ABL solution, we moved from being just a creditor to a genuine partner, ensuring the client not only survives, but has the capital needed to thrive in the years ahead.”