Case Studies

The situation:

A pulp and paper mill, recently acquired by an investment group.

The challenge:

To maintain productivity and ensure continued work for its employees, the mill needed to replace aging forklifts with new ones. As the new equipment would be under warranty, it would significantly reduce maintenance costs.

The mill needed $250,000 to finance the four new forklifts. But it didn’t have money in its capital budget to buy them. What’s more, the mill had been recently acquired – so there were no historical financial statements for the resulting new entity. The off-shore based parent company was unwilling to co-sign or otherwise guarantee the financing.

Because the mill did not meet the “checkbox” criteria posed by traditional lenders – something that happens frequently in all kinds of industries – the vendor was unable to offer financing through its regular in-house program.

The solution:

Atticus took a common-sense approach to the problem. We looked at the size of the new entity, and the historical financial records of its predecessor – plus the fact that the mill purchase had been a multi-million-dollar deal. To us, the mill simply did not appear to be a poor risk. And, since the mill was already making regular lease payments on its aging forklifts, this new deal would not significantly increase its expenses. With all this information in hand, we were able to convince our underwriters to approve the new lease.

The results:

A win for all parties. Atticus was able to issue the lease approval, the vendor got the sale – and the client got the upgraded equipment they needed to maintain productivity and secure revenues and jobs.

The situation:

A growing provider of medical rehabilitation services, with several locations already established. The provider felt they could help ensure their continued growth by attracting a highly renowned researcher, university professor and author that had recently moved to the area to join the company. This professor was so highly regarded as a rehabilitation specialist that recruiting her had the potential to generate huge amounts of new business for the group.

The challenge:

To support her practice, she required highly specialized equipment – with a $100,000 price tag. The rehab group simply didn’t have enough room on their line of credit, nor enough cash on hand, to acquire the equipment.

They wanted to lease the equipment. But they would be opening a new area of practice! They worried about carrying the new debt during the time it would take to ramp up the new service offering. In short, how could they get up to speed, affordably, and in a hurry?

The solution:

Atticus solved their challenge with a step-up payment plan. For the first three months, the step-up plan required them to make substantially reduced payments. The plan would give them enough time to get the new equipment installed and operational – and to generate enough business for their new area of practice to handle the regular lease payments.

The results:

At the end of the three months, the provider would have more than enough new cash flow to support regular lease payments. The step-up payment option put significantly less financial stress on the group during ramp-up than other leasing companies’ regular five-year terms would have. Atticus was able to offer a better solution because we took the time to understand the client’s business model.

The situation:

A kitchen installation company that specializes in fabricating and installing granite-counter-tops. The company wanted to increase their capacity by updating their equipment and revamping their processes in order to take advantage of tremendous growth opportunities.

The challenge:

Manually cutting granite counter-tops took up to two-and-a-half hours per kitchen. A new bridge saw would reduce that time to just 20 minutes per job – a huge productivity gain. But the new saw cost nearly $80,000. The company didn’t have enough credit line available to finance it. And buying outright would strain the cash reserves they needed for daily operations and to fund their expected growth.

The solution:

Atticus worked with the company to figure out how much new revenue would be created by the increased productivity. From there, we worked out what lease term – three years, four years or five years – would be optimal for them. We went well beyond the standard application form that other leasing companies would have stopped at. We worked through the numbers with the client – and provided them with the understanding and confidence they needed to take on the lease and expand their capacity.

The results:

The new equipment gave the company significantly enhanced capacity. That meant they could now confidently bid on multi-unit apartment projects – without fearing they would fall behind schedule. Automation has opened up many more opportunities for them, and increased both their revenues and their ability to compete successfully in a time-sensitive, margin-conscious industry.

The situation:

A neighbourhood pub that had undertaken major renovations over the last couple of years to revamp facilities and rebuild its client base.

The challenge:

How to obtain financing for non-traditional assets in a business perceived as being high-risk. The pub had a large deck that was unusable during cold or wet weather. Glassing in the patio and adding indoor-style furnishings would make it a year-round facility, increase capacity, and enable the owners to book more group and party business.

Unfortunately, traditional leasing companies regard pubs as high-risk businesses. They also view items such as glass panels, fire pits and big screen TVs as non-leasable equipment.

The solution:

Atticus looked at the strength of the pub’s operations – its customer base and cash flow – and at the increased revenues the renovations would bring. We took into consideration the fact that the pub owners also owned the property. So, they’d be making improvements to a significant asset, rather than to someone else’s property. By telling the pub’s story in the context of its historical ability to meet its obligations, Atticus gave lenders the additional comfort they needed to approve the lease, in spite of the non-traditional assets.

The results:

The pub owners received 100-percent financing for their improvement project – while preserving their cash for promotions and inventory. The pub can now enjoy increased revenue, new clientele and year-round success!

The situation:

A construction company with a new contract – and needing a new, $400,000 dozer to fulfill it.

The challenge:

The vendor-manufacturer financing program had very attractive rates. But the term was so short that the payments were simply too high! The construction company’s new contract required the new equipment – but the contract didn’t pay enough to offset the high payment level that came with the vendor-manufacturer’s short financing term.

The solution:

Atticus knew the equipment would have a strong resale value for a lot longer than the financing term offered by the vendor-manufacturer. We used our considerable experience with the construction industry – and our understanding of the value of the asset – to build a strong business case for a longer-lease term with a residual value at the end that was forecasted to be well below market value at that time.

The results:

Atticus was able to provide lease terms $1,400 a month lower than those offered by the vendor-manufacturer. This improved the construction company’s cash flow. And, it enabled them to meet the contract requirements – while acquiring a valuable asset that would help them win further lucrative contracts.

The situation:

A well-established warehousing and distribution company with three warehouses in different locations, operating at full capacity – and wanting to expand.

The challenge:

Inefficiencies caused by the lack of a central facility made it difficult for the company to expand their business. They were also facing significant rent increases on their current locations. A single, larger facility would enable them to consolidate and streamline their warehousing and distribution activities.

They had an opportunity to move into a much larger, custom-built facility – but, because they’d had a challenging couple of years in their inefficient facilities, the bank would not finance the equipment needed to outfit a new warehouse.

The solution:

Atticus took the long view. We examined the company’s financial statements. We got to know more about their business, their management, their growth opportunities. We learned how a new facility would improve business – and then we built a compelling case for another lender to come in and provide off-balance-sheet financing.

The results:

Our financing solution enabled the company to acquire the warehouse racking, walk-in coolers, forklift equipment, security system, IT systems and other equipment they needed to outfit their much larger warehouse. We also established a long-term working relationship with them to make sure they will continue to get the new equipment they need – as they need it.

The situation:

A large greenhouse, growing tomatoes and peppers, wanted to introduce automation to increase production and reduce labour costs for grading, sorting and packaging their products. The business case for the new equipment was very compelling, but the company had trouble qualifying for a bank loan.

The challenge:

Because agriculture is a cyclical business, it can be difficult to get financing when coming off a poor crop-sales year.

The solution:

Atticus looked at the full trend for greenhouse-based businesses. We went back far enough to show that the business had the strength to withstand market fluctuations and poor crop-sales years. We then strategically approached one of our lenders who had specific experience in agricultural lending – and we supplied a comprehensive review that persuaded them to provide an attractive financing package to our client.

The results:

Besides enjoying labour savings, the new, highly automated production line allows the company to get their product to market much faster – and in fresher condition – than previously. They have not only gained a competitive edge, but have also been able to generate new revenues by offering their grading, sorting and packaging to other nearby greenhouse growers.

The situation:

A property maintenance and servicing company that provides building maintenance services for property managers with commercial and high-rise buildings.

The challenge:

As part of their building maintenance work, the company was routinely renting boom lifts and man lifts to provide a full range of services. That meant their rental costs were a significant expense item on their financial statements.

The solution:

Atticus showed them how they could acquire their own lifts – by leasing the lifts for much less than the monthly rental rates they had been paying.

The results:

The company now has ready access to their lifts whenever they need them and is paying far less than they were previously just to rent. Not only that, but they will be able to buy them outright at the end of the lease term! They will then enjoy continued benefits from the equipment for years to come, without a monthly payment!

The situation:

A strata/condominium corporation wanted to install energy efficient LED lighting.

The challenge:

The building owners had completed an energy audit and it was determined that the building could realize substantial energy savings by installing LED lighting. The only problem was that the cost was about $50,000 to do the installation and the owners were reluctant to deplete their reserve fund or to have a special assessment from the owners to cover the cost.

The solution:

Atticus was able to provide them a financing structure that solved the problem without any impact to their cash position. We set up a lease-to-own where there would be no payments for the first 90 days. The LED supplier was paid in full after the installation was complete and the strata owners did not have to start making their lease payments until after they started seeing the energy savings on their electricity bills.

The results:

The strata owners not only got reduced energy costs without having to pay for everything up front, but they also enjoyed vastly improved lighting which improved the look of the building as well as the security in their parking garage. The even better news is that the payback was pretty quick in this case and once the lease is complete, the monthly savings will get even bigger.