Business Expansion

Background: In response to the rapid expansion of the construction sector within a growing island economy, a local service provider identified the need for business expansion. With population forecasts suggesting significant growth in the coming decade, the company sought additional financial support. A mutual contact referred them to Tailwind, who was engaged to arrange a senior debt loan to facilitate the company’s growth initiatives and capitalize on emerging opportunities in the construction industry.

The Deal & Funding: Tailwind partnered with a leading bank in the Caribbean to facilitate corporate loans for three related companies, totaling US$2.39MM.

The first borrower was approved for three facilities. The first facility was a revolving operating facility of CI$200,000 for working capital, with a rate of prime (3.25%) + (2.25%) which at the time was an effective interest rate of 5.50%. The commitment for the revolving line of credit was a maximum of 12 months, with interest paid monthly, subject to annual review. The second facility was a non-revolving term loan of CI$1,100,000 for working capital and capital expenditures, with a rate of prime (3.25%) + (1.5%) which, at the time, was an effective interest rate of 4.75%. Repayment was to be interest-only, payable monthly for 12 months following disbursement of the loan facility. After the 12-month interest-only period, monthly principal payments  plus interest were to be paid based on a 72-month amortization. The third facility was a Visa business card. 

Security:

• • All monies debenture over the fixed and floating assets of (the “Parent”) and subsidiaries to be stamped to cover CI$517,500.

• • First Demand Legal Collateral Charge stamped in the amount of CI$5,175,000 over purchased property, stamped collateral to the debenture over the Borrower.

• • Assignment of all perils insurance over purchased property with the bank noted as loss payee.

• • Guarantee from all shareholders and related companies.

Security:

All monies debenture over the fixed and floating assets of (the “Parent”) and subsidiaries to be stamped to cover CI$1,321,000.

• • Assignment of inventory and receivables of the Borrower.

• • Debt service reserve of CI$52,250.

• • Guarantee from the Cayman Islands Government for CI$550,000 (50% of facility 2).

• • Guarantee from all shareholders and related companies.

The second borrower was approved for two facilities. Facility 1 was a revolving global overdraft for CI$150,000 with a rate of prime (3.25%) + (2.25%) which was an effective interest rate of 5.50%. This overdraft was to help with the borrower’s daily operational expenses, with a commitment for a maximum of 12 months and interest paid monthly. Facility 2 was a Visa business card.

Security:

• • All monies debenture over the fixed and floating assets of (the “Parent”) and subsidiaries

• • Assignment of inventory and receivables of the borrower.

• • Assignment of general/all perils insurance for the borrowers.

• • Guarantee from all shareholders and related companies.

The third borrower was approved for a non-revolving demand loan of CI$517,500 with a rate of prime (3.25%) + (1.5%) which was an effective interest rate of 4.75%. The loan was intended to support the acquisition of a new company, and the repayment was set to be made monthly via blended payments plus interest, based on a 180-month amortization.

The Conclusion: All three borrowers successfully secured their loans and were able to complete their acquisition and expand their businesses. The transaction was completed in 2021, when business was just starting to reopen after the COVID-19 pandemic.