Edge Lending Criteria.
Loan Structure – revolving lines of credit, with or without term loans wrapped in, secured by accounts receivable, inventory, machinery & equipment, owner occupied commercial real estate, and an abundance of imperfect collateral where applicable.
$5MM – $50MM.
Typically 3-4 years.
Up to 90% of accounts receivable; up to 60% of inventory, machinery % equipment and owner occupied commercial real estate.
Lower-middle market companies with $5MM – $500MM in revenue. Established companies as well as some start-ups, turnarounds and pre-revenue companies.
USA, Canada, and some parts of Europe.
Working with Edge.
Some clients’ paths to success will not be linear. Typical reasons our customers work with us include:
- NRapid growth
- NLoss of a major customer
- NOperating losses/negative net worth
- NBusinesses that require frequent borrowing
- NInability to meet financial covenants
- NNeed for a lender to have a nimble approval process as businesses grow
- NTax issues
- NSeasonal fluctuations
- NTurnaround and restructuring
Health of borrower – Positive cash flow or projections showing positive cash flow in the near future; Evidence that the business is likely to continue as a going concern. We are not “loan to own” lenders.
Edge’s 5-Step Inquiry Process:
To get started, please fill out the intake form on our get started page and one of our customer service-focused business development professionals will set up a call to answer all of your questions about our solutions and determine if an Edge loan might be right for you and, if so, what the loan amount might be.
If you decide to move forward, after a NDA is in place, you would upload some standard documents relating to your business and any assets you’d like to leverage to unlock current liquidity.
After some more q&a, if a fit for both parties, Edge would issue a term sheet outlining what a loan with us would look like. All of our term sheets are vetted by our full Credit Committee prior to sending.
If the terms are accepted, Edge would begin due diligence including conducting standard appraisals and field exams, where applicable.
If all is as described, Edge sends loan documentation and a revolving credit facility is put in place, lending against the company’s collateral to provide liquidity.
Edge Loan Mechanics.
Borrowers leverage their collateral (accounts receivable, inventory, machinery & equipment, owner-occupied commercial real estate and an abundance of imperfect collateral), and give Edge a security interest in it in exchange for a revolving line of credit.
Edge agrees to provide liquidity whenever the borrower requests an advance, up to a pre-determined amount and percentage of collateral value.
When borrowers request an advance, they also provide a current accounting of their collateral via a borrowing base. Edge then sends the requested capital to the borrower’s bank account. Borrowers can ask for as little or as much as they need at a given time to control the cost of their capital.
As borrowers sell more product and buy more inventory, those new assets are available to include in the borrowing base to lend against.
The amount outstanding is paid down as receivables and sales hit their lock box.