After he had been turned down by multiple local banks, the owner of a biodiesel company contacted Radix hoping to secure $2 million for equipment and working capital. The potential borrower could not understand why lenders were only willing to fund him at high interest rates. After all, his business was grossing over $10 million per year, and he had over $8 million of equipment he had offered to pledge as collateral.
After Radix took a look at his financials, we were able to easily identify the borrower’s issue. Although he had great credit and steadily-increasing revenues, he had already taken out over sixty five separate equipment loans and business credit cards totaling around $3 million, and each one demanded high monthly payments. All told, the borrower was paying over $120,000 per month just to service his debt. Our solution was simple: Radix consolidated the borrower’s existing loans and lengthened the amortization to ten years. Even after providing the additional $2 million he had been looking for, we were able to reduce the borrower’s monthly payments by $40,000.