Pasadena Private Finance LLC (PPF), a Pasadena-headquartered non-bank lender, has entered into a $30 million senior credit facility with East West Bank, Southern California’s largest publicly traded bank, has recently announced the company.
Michael McAdams, Managing Director of PPF, said that with the East West Bank Enhanced Credit Facility, PPF will be able to help lower middle market businesses or businesses generating between $1m and $5m in flow. cash to raise capital.
Unlike traditional banks, McAdams said the PPF can be more flexible in determining the type of loan a business needs.
“We are not a traditional bank. We can be more flexible and creative in how we view a company’s credit profile and the type of loan they might need,” McAdams said. “But because we are looking for the guarantee of the principal owner, it is a great comfort for us when we give loans.”
A senior credit facility is secured. In the eyes of the lender, there is a guarantee from the company providing the loan. In the event of a business collapse, a senior secured loan would be paid off by the sale of collateral assets before other, more junior loans could claim assets, according to www.corporatetrustfund.org.
Senior debt is a senior loan for development finance that would typically constitute the majority of the funds needed to complete a real estate development project. These facilities must be used specifically for real estate development and are structured in such a way as to best adapt to the proposed program, according to positivecommercialfinance.co.uk.
McAdams said the PPF offers loans with interest rates around 7-10%, cheaper than “hard money lenders” but higher than a bank.
According to McAdams, the PPF envisions lending to “good borrowers” and proven entrepreneurs, excluding start-ups and owners of brand new businesses.
He said the PPF could also accommodate businesses that suffered losses due to the COVID-19 pandemic, especially businesses that struggled to recover for several months to a year during the pandemic.
“If it’s something where the company has been losing money for several years, it’s going to be difficult for us. We are still a financial institution with fiduciary duties to our investors,” he said. “We look forward to doing business with people who have a proven track record of making things work even in difficult times.”
In a statement, Iain Whyte, chairman of PPF and Pasadena Private Holdings, PPF’s parent company, welcomed the company’s partnership with East West Bank.
“We were fortunate to find a nationally recognized banking partner in the Eastern West Bank willing to listen to our unique story and roll up our sleeves, just as we do for our own borrowers. The fact that East West Bank is also located in our hometown of Pasadena is a wonderful bonus,” said Whyte.