How We Financed a $7.7 Million Blue-Sky Maintenance Company in Alaska

Adam worked all over the globe in the oil and gas industry and it was taking a toll on him. He did very well and made a lot of money but as they say “money isn’t everything”. He found this maintenance business in his home state of Alaska that could possibly be the start of an empire.

There was a total project cost of $7.7M on this acquisition and pretty much all blue-sky. We are a cash-flow lender, so we are ok with these under-collateralized scenarios.

We structured this acquisition with an SBA 7A for $5M, which is the maximum amount that anyone can borrow under the SBA guidelines. Then, we did a second conventional note in the pari-passu position for $977K.

Adam wanted the seller to hold a note for $960K which we allowed. Lastly, he injected $780K which was approximately 10% of the total project cost. The rate was 2 points over prime for the $5M and 2.75 points over prime for the second $977K conventional loan. Not a bad structure for a deal this size.

MVB Bank has the ability to facilitate these unique pari-passu financing structures due to the fact that we have a very strong balance sheet and can portfolio these larger notes.

Most banks have to sell off their notes so they stay liquid and can make more loans. This is not necessary in our case. Let’s do some Deals! What deals do you have? I want to talk to you.