TowerCap Provides $2 Million Confidential Factoring Facility to Infrastructure Contractor
TowerCap has provided a $2 million confidential, non-notification factoring facility to a 10-year-old Oklahoma directional boring contractor serving major infrastructure and utility customers. The facility was structured around customers that do not work with third-party finance providers and was completed as the contractor emerged from a challenging trading period, supported by a strong customer base, healthy work pipeline and substantial receivables. The deal reflects TowerCap’s experience financing telecoms contractors and service businesses where conventional factoring structures do not always fit.
Several of the contractor’s customers do not work with third-party finance providers and would not accept instructions to remit payments to an account in the name of a factor. A conventional notified factoring structure was therefore not commercially workable.
TowerCap structured the facility on a confidential, non-notification basis, allowing the contractor to maintain its existing customer relationships and payment processes while still accessing working capital against eligible receivables.
The structure gives the company access to up to $2 million of working capital as invoices are generated, while customers continue to interact with the contractor in the ordinary course of business and remain unaware that a factoring facility is in place.
Non-notification facilities require a different level of underwriting and ongoing monitoring. The factor cannot rely on direct communication with account debtors in the normal course, making visibility into invoicing, collections, account activity and the underlying operating business particularly important. That was especially relevant in this transaction as the company emerged from a more challenging period of trading.
TowerCap’s confidential factoring program allows qualifying businesses to finance receivables without disrupting established customer relationships or payment processes. It can provide smaller companies, including those that may not qualify for traditional ABL facilities, with an important feature more commonly associated with those structures: customers need not be aware that receivables are being financed.
In this case, TowerCap structured a $2 million facility around the strength of the contractor’s receivables, its current performance and TowerCap’s experience in the telecommunications and infrastructure markets.
Enquiries to: saul@towercap.com