Kaldes Financial Advises on New Revolving Line of Credit for Challenged Food Products Company

Kaldes Financial’s latest closing involves a bank-exit refinancing for an importer and wholesaler of specialty consumer food products based in the western US (Project “Organic”, or the “Company”).? Project Organic had started from humble beginnings with one customer back in the 1980s, and had grown organically to nearly $50 million in sales with over 300 wholesale customers by 2020.

The Company had been with the same bank for over 25 years, but in the aftermath of COVID, an inventory over-stock situation that pervaded the entire industry, led to a sudden drop in the company’s sales in 2022, causing the Company, in June of that year, to report a monthly net loss for the first time since its inception.? By the end of the year, the Company had tripped a covenant, so the bank called a default and began the process of exiting the credit facility.

From January to July 2023, the Company’s CFO made a valiant attempt to replace its financing, but could not get the borrowing terms that the company really needed to effect a turnaround and replace the bank.? So in July 2023, the company’s CEO brought Kaldes Financial into the mix, and quickly Kaldes went to work in earnest to find the elusive deal the Company (and the bank) desperately needed.

From the beginning, Kaldes recognized that the key to a successful outcome was to focus its efforts in favor of potential lenders that had the right culture for this financing – first and foremost the ability to be aggressive on inventory advances and understand the turnaround plan. ??This would allow the Company time to work through its inventory to more appropriate levels.? After a quick competitive process, the Company was able to get the terms it needed to flourish once again, using a more flexible, yet disciplined, approach to lending, without a material sacrifice on pricing.

Said the Company’s CEO, “Kevin Pearce and his company, Kaldes Financial, proved to be an extremely valuable ally in our search for a new lending relationship.? The Company was in a challenging ?situation and required a unique skill set, similar to that possessed by Kevin. ?Kaldes identified the right lenders for our situation, and orchestrated a customized and competitive process that gave the Company several very compelling refinancing options.? In the end, we were very happy with the deal that we got as a result of Kevin and his expertise.”

Andrew Wilhelmy of Seacoast Business Funding, said, “Kevin was a pleasure to work with and a great resource in helping us understand Project Organic’s funding needs. We were able to come up with a very unique structure to make sure the Company could restructure its balance sheet and obtain the working capital it needs for future growth”.??

Kaldes Financial specializes in finding alternative financing sources when companies’ existing financing is no longer the right fit.? If you know of a company that needs professional assistance in obtaining or restructuring debt, please feel free to reach out to Kaldes Financial at [email protected] .

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About Kevin Pearce and Kaldes Financial:

Kevin Pearce is a 30-year veteran of the commercial finance industry, a past board member for the Association for Corporate Growth (ACG), and current President of the Arizona Chapter of the Turnaround Management Association (TMA).? Kevin is also a Certified Management Accountant and Certified Financial Manager, and is the founder and CEO of Kaldes Financial, a boutique debt placement advisory firm.? Kaldes specializes in alternative financing solutions for special situations, unique borrowers, and for those companies in transition.