Specialty Meat Distributor
$3,000,000 Line of Credit
A specialty meat distributor was asked by First Community Financial’s parent bank to transfer their revolving credit relationship to First Community as the company was incurring losses. First Community’s parent bank provided a SBA term loan on the company’s building to an affiliated entity with common ownership. In 2009, First Community provided a $1,500,000 revolving line of credit to the company. During the next 12 months, the company incurred significant losses and was forced to seek a buyer for the business. The strategic buyer was unable to obtain the acquisition financing necessary for the purchase as a result of complications with the SBA loan. The buyer had been in business for over 25 years, was credit worthy and had sales in excess of $1 billion.
First Community Financial management contacted the buyer and indicated an interest in financing the acquisition. The buyer accepted the proposal after obtaining approval from their existing lender. The revised structure was a $3,000,000 revolving line of credit with a $1,000,000 sublimit on inventory. The acquisition was completed in July 2010 and the new owners have signed contracts with their existing customers that will double the size of the business during the next 12 months.
