Altriarch Specialty Finance Funds $43.5 Million to Multiple Factoring Companies
Altriarch Specialty Finance Fund, LP (“Altriarch”), a leading private credit manager based in Charleston, South Carolina, recently provided $43.5 million in committed capital to specialty finance lenders across the U.S. Altriarch offers flexible capital solutions in the form of senior, mezzanine and participation capital, with a maximum of $50 million per borrower.
The current economic landscape poses challenges for the factoring industry, with increasing interest rates and rising inflation. As a result, factoring companies face difficulties in managing their balance sheets and are exposed to higher levels of risk. To adapt to this changing environment and remain competitive, specialty lenders are adopting new debt management strategies. In addition, while there are challenges, there are also ample opportunities for factors as banks continue to tighten credit and reduce lending to small businesses in an effort to increase deposits.
“It’s no secret there is a growing number of banks that are steering clear of taking risks with credit extension,” explained McLean Wilson, Managing Partner and Co-CEO of Altriarch. “An immense prospect has emerged for our firm to furnish pliable capital to factors, who in turn can aid their business clients in need of factoring. Our team’s extensive knowledge, coupled with the present market conditions, has enabled us to provide unparalleled assistance to factors, empowering them with the ability to provide better terms and win more competitive deals.”
Altriarch’s dedication to growth is evident in its recent closings and the introduction of a new structured capital investment strategy, further strengthening its lending capabilities in supporting specialty finance companies. Recent highlights include:
A $15 million senior secured line of credit to a company located in the Southeast that specializes in providing financial solutions to the construction industry via factoring. The borrower, which has been in business for over 25 years, approached Altriarch as their current line was set to expire. In addition, the borrower’s portfolio had grown too large for the client’s former lender at the time and they needed a facility large enough to support the current pipeline and future growth of the portfolio. The Altriarch team collaborated with and worked very closely alongside the borrower to complete the necessary diligence to open the facility in just a few weeks.
A $11 million commitment to participate in the existing factoring line of a temporary and permanent recruiting and staffing firm located in the Southwest. The borrower had been experiencing consistent growth and requested an increase to their existing line, but their factor did not have the capacity. As a result, this well-known factor approached Altriarch to participate alongside. The initial commitment from Altriarch was $3 million, but it has since grown to $11 million due to the success of the borrower and strong relationships between all three parties.
A $5 million participation with a factor based in the Southeast. The factor, which has been operating since 2008, was maxed out on their senior line of credit and was looking for a participant in order to fund a large deal. Altriarch initially issued a $2.5 million line, but included an accordion to increase the line to $5 million if certain thresholds are met.
A commitment of up to $2.5 million to participate in an existing factoring facility of a government staffing company located in the Northeast. The deal was sourced by a factor with whom Altriarch has a longstanding relationship with. During the diligence process, Altriarch and the factor successfully structured the deal to include eligibility (with a lower blended advance rate) on additional receivables.
A $10 million mezzanine credit facility with a financial services firm on the West Coast that provides capital solutions to the debt settlement industry. The borrower approached Altriarch following the exponential growth of their portfolio due to increased demand within the industry. The junior line of credit included an advance rate of 95% on eligible assets, which allowed the borrower to draw additional capital outside of their senior line of credit. The initial draw was $10 million, and the deal also includes a $10 million accordion.
With Altriarch’s support, specialty finance lenders can thrive even in times of economic uncertainty, securing the financial backing necessary to navigate the ever-changing market.
