Barrington Capital has a reputation for helping our clients weather economic challenges by offering creative solutions. Our team demonstrated this creativity once again when partnering with a well-known nonprofit organization.
The organization was facing cash flow challenges because donations were not aligned with operational needs. Monthly expenses remained steady, but funding tended to arrive early or late. The interim CFO reached out to explore options and wanted to refinance the nonprofit’s real estate. When that avenue proved impractical, our team uncovered a better option.
A Refi Wouldn’t Solve the Real Issue
Commercial real estate funding is a common solution for businesses that are cash-strapped. A real estate refinance seemed like the obvious path for generating liquidity, but the numbers didn’t align. Cash flow fell short of the debt requirements. Even if the refi went through, the nonprofit would likely face the same capital shortage 12 months later.
We stepped back to look at the bigger picture and explore other options. Our team identified a better approach.
Unlocking a Better Solution Through Asset Strength
After reviewing the nonprofit’s portfolio, we recommended a $4MM line of credit secured by its stock holdings. This approach was a better fit for the organization’s actual operating rhythm. The revolving line let it draw funds when donor support arrived late and then pay the balance down once contributions cleared.
Our structure delivered a more efficient and sustainable form of commercial capital, especially compared to a rigid term loan tied to real estate. It also preserved borrowing capacity for future needs.
Why a Portfolio-Backed LOC Worked
The nonprofit walked away with a structure that worked with its business, not against it:
Instead of wrestling with a refi that didn’t fit, the organization gained a powerful financial tool that supported its mission.
Partner With a Strategic Ally
Every organization deserves a funding partner that looks for funding solutions that fit its unique needs. If you require a different approach, Barrington Commercial Capital is here to help.
Want to explore other commercial capital deals that BCC has brought to life? Learn how we helped an affordable housing builder triple its size, or contact us for personalized guidance on how we can serve you.
