Pasadena Private Finance LLC (PPF), a Pasadena-headquartered non-bank lender, has entered into a $ 30 million senior credit facility with East West Bank, the largest publicly traded bank in Southern California, has recently announced the company.
Michael McAdams, CEO of PPF, said that with the enhanced Eastern West Bank credit facility, PPF will be able to help lower middle market businesses or businesses generating between $ 1 million and $ 5 million. of cash flow to raise capital.
Unlike traditional banks, McAdams said PPF can be more flexible in determining what type of loan a business needs.
“We are not a traditional bank. We can be more flexible and creative in how we view a business’s credit profile and the type of loan it might need, ”McAdams said. “But because we are looking for the principal owner’s collateral, it is a great comfort to us when we are making loans.”
A senior credit facility is secured. There is a business guarantee that secures the loan in the eyes of the lender. In the event of a business collapse, a senior secured loan would be repaid through the sale of the secured assets before other more junior loans could claim assets, according to www.corporatetrustfund.org.
Senior debt is a senior development finance loan that would generally constitute the majority of funds required 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 scheme, according to positivecommercialfinance.co.uk.
McAdams said the PPF offers loans with interest rates of around 7-10%, cheaper than “hard money lenders” but higher than a bank.
According to McAdams, the PPF plans to lend to “good borrowers” and proven entrepreneurs, excluding start-ups and owners of brand new businesses.
He said the PPF could also accommodate businesses that have suffered losses due to the COVID-19 pandemic, especially businesses that have struggled to recover for several months to a year during the pandemic.
“If this is something where the company has been losing money for several years, it will be difficult for us. We are still a financial institution with fiduciary obligations 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 tough times. ”
In a statement, Iain Whyte, chairman of PPF and Pasadena Private Holdings, PPF’s parent company, praised the company’s partnership with East West Bank.
“We were fortunate to find a nationally recognized banking partner in the East West Bank, ready to listen to our unique story and roll up its sleeves, just as we do for our own borrowers. The fact that the eastern West Bank is also located in our hometown of Pasadena is a wonderful bonus, ”said Whyte.