TMA 2019 Conference:
Factoring lenders can scale deal flow by turning distressed situations into pristine ones ready for first position lending. The advantages of a simple reorganization over prohibitively complex global settlements is discussed by Aaron Todrin of Second Wind Consultants and Nancy Kalman of United Capital Funding.
Alternative lenders face distinct challenges in distressed business investment. Over-leveraged companies in need of factoring/ABL facilities won’t qualify for terms when assets or receivables are encumbered by a host of secured and subordinate debt.
An Alliance with Second Wind will reorganize your target entity, removing all subordinate leans and obligations while putting you in first position to lend.
Over the past ten years, Second Wind has conducted thousands of reorganizations in the distressed space. Through a single, frictionless transaction, we preserve the full ongoing concern value and continuity of operations of a distressed business while eliminating all subordinate debt. For the ABL or factoring professional, we deliver back a pristine, debt-free enterprise in 45 to 60 days.
For alternative lending professionals, Second Wind turns untransactable deals into great situations.
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Aaron Todd Rijn here Second wind consultants we’re at the TM A distressed investing conference in Las Vegas 2019 I’m sitting here with Nancy Kalman of NIDA capital funding so we’re Here at the distressed investor Conference we can assume that you guys Dabble in the world of distressed Companies so what type of things make Factoring Arrangements difficult to Accomplish I think it could be really Two things and that could be number one It could be the the character in the Credit of our borrower and it could be How much receivables versus debt they Have out there we need to take a first Lien position and the accounts Receivables so therefore it if there is A current lender in there with a that Has filed a UCC lien we need to be in First position and have enough to take Them out pay them off what percentage of The time does debt prevent you from Closing a deal because the debt Structure is too hectic too chaotic in There many many times because there is Not a receivables to pay off whether They have a merchant cash advance Whether they have another lender in There it’s it’s very difficult so have You have you heard of article 9 Transactions at all heard of them but I Don’t know enough about them and I don’t Know that we’ve dealt with them enough
Interesting so the benefit of an article 9 transaction is that it it eliminates All the subordinate creditors so that Those unsecured the MCA is whatever Whatever liens remain on the company Would be eliminated and they give you First position to lend against the Receivables for a new company is that is That something that would benefit that Would be an enormous benefit and help Because there we’ve absolutely had to Turn down deals when we could not take a First position yeah annalee so if that Could be structured that way and you Would get rid of event and we could Search with getting a first lien we’d be Able to get a lot more deals done yeah Absolutely and there are so many Businesses out there with exhaustive and Extensive debt schedules that really Prevent them from getting the financing That they need to really operate and Succeed and they need that they need That cash flow so I think that would be A very Thing two factors great thank you for Your insight it’s been nice talking to You and I hope you have a great Conference thank you you too