Financial sponsor wants to refinance existing junior debt on a portfolio company

A retail business negatively impacted by COVID and significant seasonality seeking to follow its departing relationship manager.

The situation

The borrower wants to follow its longtime banker to a new financial institution. Given this is a new relationship to the bank, there is some discomfort about the seasonality and one-time losses.

The problem

Borrower’s business slowed during COVID and is extremely seasonal. During the summer months the business slows and the line is nearly 100% inventory reliant.

The CollateralEdge solution

The Banker was looking for 15% of CollateralEdge support to offset the extraordinary losses and the inventory reliance within the borrowing base.

Bank wins

The bank gains a new client despite near-term difficult underwriting risk. The full relationship moves over yielding the bank new deposits and treasury management services.


The results were outstanding.

“CollateralEdge is solving a massive problem for community banks that will positively impact thousands of hard – working entrepreneurs.”

— Kneeland Youngblood, Founding Partner, Chairman & CEO, Pharos Capital

Borrower wins

The borrower remains with their long-time banker.Their relationship with the new bank is now off to a great start.