STRATEGY ONE > Volume III > Number I

CAP Program Helps Cash-Strapped Businesses Leverage Assets

A national manufacturer of plastic bottle enclosures was looking to grow its business after several years of treading water. However, the company needed new machinery and equipment to put it on a footing with its larger rivals.

The manufacturer spoke to its existing lender about increasing the term of its loan or its real property debt, but to no avail. After a lengthy search, it discovered Buxbaum/Century and its CAP program.

CAP (Cash Advance Program) is an asset-secured loan program for commercial entities. "Companies who are unable to obtain more traditional financing through banks or regular asset-based lenders come to us with their liquidity challenges," noted Richard Ellis, executive v.p. of Buxbaum Group, which co-owns Buxbaum/Century with Century Services of Canada.

"What we look for are unencumbered assets such as machinery and equipment or real property," explained Joe Seigo, regional manager for Buxbaum/Century. "Using these assets as collateral, we can focus on the virtually 'impossible-to-fund' deals that are too difficult for most asset-backed lenders."

With this philosophy in mind, Buxbaum/Century didn't see the bottle lid manufacturer as a bad credit risk. It saw valuable collateral in the form of existing machinery and equipment, and real property—enough to justify a $6.15 million loan for 12 months on both existing M&E and capital expenditures.

Prior to its talks with Buxbaum/Century, the manufacturer had arranged a sale/leaseback deal on its real property. However, it required 90 to 120 days to close. Eager to exercise this option, the manufacturer asked Buxbaum/ Century what it could do to help.

Buxbaum/Century was able to come up with a 90-day, interest-only bridge loan of $4.5 million, using the client's real property as collateral. This allowed the manufacturer to take advantage of the collateral's value almost immediately, even before funds became available through the sale/ leaseback transaction.

The result? Thanks to Buxbaum/Century's CAP program, the manufacturer was able to unlock the full value of its assets and use the resulting capital to win a major piece of new business.

"Because Buxbaum/Century is a

small lender, we can move more

quickly," Ellis pointed out. "We can

provide a bridge loan in as few as

Richard Ellis

three weeks, while a bank is still

taking care of its due-diligence. So we're not competing with

larger lenders. We're often just keeping their clients going

forward while they wait for longer-term financing to come

through."

Buxbaum/Century is a joint venture between Buxbaum Group and Century Services, formed in 2000 to provide machinery & equipment and industrial inventory appraisal and auction services for financial institutions and corporations throughout North America.

Under the CAP umbrella, Buxbaum/Century can provide financing to companies in many different modes, including debtor-in-possession bankruptcies. Transactions can range from as little as $250,000 to as much as $20 million or more.

"The key," said Ellis, "is that our lending is not dependent on positive financial statements, stability in the borrower's business, or even cash flow in some cases. We are interested primarily in the hard assets and their underlying value."

People making news...

Adam Cohen has joined Buxbaum Group as an appraisal analyst. Cohen is a 2004 graduate of the University of California at Santa Barbara. While attending college, he held internships at two consumer products industry companies. Most recently, he interned at Ray's Apparel, an rvine, Calif.-based designer of juniors, boys and men's

Adam Cohen

apparel lines for Ocean Pacific, where his responsibilities included customer service,

design, sales and accounting. Earlier, he interned in sales and customer service at Sparco USA, an Irvine-based importer of competition suits, gloves, seats and racing accessories from Italy.



CAP Program Helps Cash-Strapped Businesses Leverage Assets
A national manufacturer of plastic bottle enclosures was looking to grow its business after several years of treading water. However, the company needed new machinery and equipment to put it on a footing with its larger rivals. The manufacturer spoke to its existing lender about increasing the term of its loan or its real property debt, but to no avail. After a lengthy search, it discovered Buxbaum/Century and its CAP program. CAP (Cash Advance Program) is an asset-secured loan program for commercial entities. "Companies who are unable to obtain more traditional financing through banks or regular asset-based lenders come to us with their liquidity challenges," noted Richard Ellis, executive v.p. of Buxbaum Group, which co-owns Buxbaum/Century with Century Services of Canada. "What we look for are unencumbered assets such as machinery and equipment or real property," explained Joe Seigo, regional manager for Buxbaum/Century. "Using these assets as collateral, we can focus on the virtually 'impossible-to-fund' deals that are too difficult for most asset-backed lenders." With this philosophy in mind, Buxbaum/Century didn't see the bottle lid manufacturer as a bad credit risk. It saw valuable collateral in the form of existing machinery and equipment, and real property—enough to justify a $6.15 million loan for 12 months on both existing M&E and capital expenditures. Prior to its talks with Buxbaum/Century, the manufacturer had arranged a sale/leaseback deal on its real property. However, it required 90 to 120 days to close. Eager to exercise this option, the manufacturer asked Buxbaum/ Century what it could do to help. Buxbaum/Century was able to come up with a 90-day, interest-only bridge loan of $4.5 million, using the client's real property as collateral. This allowed the manufacturer to take advantage of the collateral's value almost immediately, even before funds became available through the sale/ leaseback transaction. The result? Thanks to Buxbaum/Century's CAP program, the manufacturer was able to unlock the full value of its assets and use the resulting capital to win a major piece of new business.	"Because Buxbaum/Century is a small lender, we can move more quickly," Ellis pointed out. "We can
	provide a bridge loan in as few as		Richard Ellis
	three weeks, while a bank is still taking care of its due-diligence. So we're not competing with larger lenders. We're often just keeping their clients going forward while they wait for longer-term financing to come through." Buxbaum/Century is a joint venture between Buxbaum Group and Century Services, formed in 2000 to provide machinery & equipment and industrial inventory appraisal and auction services for financial institutions and corporations throughout North America. Under the CAP umbrella, Buxbaum/Century can provide financing to companies in many different modes, including debtor-in-possession bankruptcies. Transactions can range from as little as $250,000 to as much as $20 million or more. "The key," said Ellis, "is that our lending is not dependent on positive financial statements, stability in the borrower's business, or even cash flow in some cases. We are interested primarily in the hard assets and their underlying value."
	People making news...
		Adam Cohen has joined Buxbaum Group as an appraisal analyst. Cohen is a 2004 graduate of the University of California at Santa Barbara. While attending college, he held internships at two consumer products industry companies. Most recently, he interned at Ray's Apparel, an rvine, Calif.-based designer of juniors, boys and men's

	Adam Cohen	apparel lines for Ocean Pacific, where his responsibilities included customer service,
	design, sales and accounting. Earlier, he interned in sales and customer service at Sparco USA, an Irvine-based importer of competition suits, gloves, seats and racing accessories from Italy.