When you partner with a seasoned business law firm specializing in commercial finance, you enjoy numerous advantages that address your organization’s financing challenges and provide practical solutions that ensure the achievement of your business goals. While many companies have in-house legal teams, they often don’t possess the depth of expertise required for today’s complex commercial finance environment.
Cobb Cole brings a wealth of knowledge to tailored commercial finance matters, delivering structuring and compliance assistance in areas ranging from real estate secured loans to lease financing and debt restructuring. We understand that strategies and solutions that were effective yesterday might not suit your business’s needs today, so we focus on finding solutions that can make the difference between successful financial transactions and missed opportunities.
Below, we explore six critical areas where hiring a business law firm can add significant value to your organization’s commercial finance endeavors.
6 Commercial Finance Services Offered by Cobb Cole Business Law Attorneys
There are many reasons to work with a business law attorney for your commercial finance needs, including access to specialized legal expertise and customized strategies that protect and enhance your business’s interests. Cobb Cole’s business law attorneys are proficient in negotiating commercial loan documents, closing transactions, and more, providing an unmatched level of service and quality while prioritizing efficiency and cost.
1. Real Estate Secured Loans
Considered a cornerstone of commercial finance in Florida’s booming market, real estate secured loans allow businesses to leverage their property assets for financial gain. Particularly advantageous for companies looking to acquire, develop, or refinance property, these loans can be versatile tools for small startups and large corporations alike.
For instance, if your growing business needs to increase its office space but lacks the necessary capital, you can secure a loan against your current property and use the funds for expansion. An established property development company wanting to build a new residential complex can use a real estate secured loan to leverage land and existing structure values to obtain the necessary capital to see the project through.
Real estate secured loans can also offer a lifeline to enterprises facing financial difficulties. By refinancing existing property, businesses can benefit from better loan terms that reduce monthly payments and ease cash flow issues.
2. Equipment, Inventory, and Receivables Financing
Companies requiring substantial equipment or that maintain extensive inventories can use business assets like equipment, inventory, and accounts receivable as loan collateral. This can be extremely helpful for companies that need to free up cash to upgrade equipment, finance the purchase of new assets, or manage their cash flow more effectively.
One example where this type of financing can help a business maintain competitiveness or increase productivity would be a retailer or wholesaler who wants to stock up before peak seasons but doesn’t have the funds on hand. Another is a manufacturing company needing to upgrade its machinery to meet increased demand and keep up with technological advancements. The manufacturer can secure a loan by using its existing machinery as collateral, allowing it to continue operations without a substantial upfront capital investment.
Receivables financing, also known as factoring, helps companies improve cash flow by selling their accounts receivable at a discount to a third party. Service companies with high volumes of accounts receivable often use this type of funding to access financing while waiting for delayed customer payments. The influx of cash is typically used for daily operations, investing in growth, or meeting other financial obligations.
3. Lease Financing
Businesses that prefer leasing over purchasing expensive equipment and property can use lease financing to avoid the high upfront costs that come with buying assets outright. It’s a cost-effective approach that offers flexibility, as upgrading or swapping equipment at the end of a lease term can be much easier.
Picture a Daytona startup tech company that needs the latest hardware for its operations. Today’s rapid technological advancements often mean the equipment will quickly become outdated and need replacement, something many newly formed businesses cannot afford. Lease financing lets companies access the latest technologies without the financial burden of dealing with depreciating assets.
Another example is a DeLand trucking company that needs a new fleet of vehicles. Buying them outright could be prohibitively expensive, particularly for a small or medium-sized transporter. Lease financing allows the company to increase its fleet by spreading the cost over time and allowing the business to replace or upgrade its fleet more frequently. Other advantages to lease financing include:
- Tax benefits, such as lease payments, that can often be deducted as business expenses.
- A convenient way to manage risk, as the leasing company typically retains ownership of the asset, reducing exposure to asset depreciation.
- Better cash flow management.
4. Structured and Leveraged Financing
Picture a Central Florida-based company looking to acquire a competitor without having to deplete its capital reserves. Leveraged financing enables it to borrow funds to finance the acquisition using the target company’s assets as loan collateral, reducing its perceived risk and potentially lowering the cost of borrowing.
Structured and leveraged financing is a sophisticated area of commercial finance involving complex financial instruments and strategies. It’s generally employed for large-scale investments, acquisitions, or business expansions, using borrowed funds to maximize growth and increase the potential return on investment. Real estate development firms undertaking large-scale projects like mixed-use developments often use it to provide necessary capital through a combination of debt and equity financing that’s tailored to the project’s unique needs and risks. This might include a mix of senior debt, mezzanine financing, and equity investment structured in a way that balances risk and return for all involved parties.
Structured and leveraged financing can also be used for management buyouts or existing debt refinancing to achieve more favorable terms. Whichever purpose you choose, this type of financing requires careful planning and a deep understanding of financial markets, as the risks can be significant. However, used wisely, it can be a transformative tool for businesses, enabling powerful strategic moves and growth opportunities. Working with a business law attorney ensures you navigate the complexities of structured and leveraged financing with expert legal insight, safeguarding your interests and maximizing the strategy’s benefits.
5. Syndicated Credits
Syndicated credit financing involves a group of lenders collectively providing a loan to a single borrower. Companies requiring substantial amounts of capital or investing in large-scale projects use the approach when the funds needed exceed the lending capacity of a single lender. It can also be helpful in corporate acquisitions where a company wants to buy out a competitor but needs more capital than a single lender can provide. A syndicated loan helps secure the required funds and mitigates the risk of a lender taking on the entire loan.
Because syndicated loans distribute the risk among several financial institutions, it’s possible for developers and other businesses to finance large ventures. For instance, a hospitality company planning to build a luxury Central Florida resort typically needs loans totaling several hundred million dollars, a sum too large for many lenders to provide. A syndicated credit deal allows multiple banks to join forces, each contributing a portion of the total loan amount, ensuring the risk is spread out among various lenders and enabling the project to secure the necessary funding.
Syndicated credits typically involve a “lead bank” with a strong market presence that arranges the loan, negotiates the terms, and handles most of the administrative work. The bank works closely with the borrower to structure the loan in a way that meets their needs while also appealing to the syndicate of lenders.
6. Debt Restructuring and Workouts
Businesses facing financial difficulties can use debt restructuring and workouts to renegotiate the terms of their existing debt with creditors. The approach is often a lifeline for companies facing financial distress, offering a strategic alternative to bankruptcy and allowing businesses to continue operations while addressing their economic issues.
For instance, a Central Florida-based retail chain hit hard by an economic downturn or a shift in market trends can quickly find itself struggling with cash flow issues due to decreased sales, which quickly leads to difficulties in meeting its debts. In this scenario, a business law firm specializing in commercial finance can negotiate with creditors on behalf of the retail chain.
The debt renegotiation process typically involves a variety of strategies, including:
- Extending the term of the loan.
- Reducing the loan’s interest rate.
- Converting some debt into equity.
This solution can provide struggling businesses with much-needed breathing room, lowering monthly payments and allowing them to reorganize their finances more effectively.
Debt restructuring can also involve more complex arrangements, including debt-for-equity swaps. In these cases, one or more creditors agree to cancel some or all the debt in exchange for a portion of the equity in the business, easing a company’s immediate financial burden and aligning creditor interests with the business’s long-term success. An example might be a Florida-based construction company that overextended itself with multiple high-value projects and is now experiencing cash flow issues, unable to meet its loan obligations. A business law firm could help the contractor negotiate a debt restructuring plan that sees a portion of the debt converted into equity that’s held by the primary creditors. The remaining debt is then restructured with more manageable terms.
Workouts and debt restructuring are complex yet vital services that require a deep understanding of finance, skillful negotiation, and legal expertise to navigate the intricacies of corporate debt. Commercial finance services provided by a business law firm can help a company successfully restructure debt, avoid bankruptcy, preserve operations, and set a course for recovery and future growth.
Other corporate and business law services Cobb Cole provides include assistance with:
- Mergers and acquisitions
- Business entity formation
- Corporate financing
- Contracts and commercial agreements
- Business transactions
- Corporate governance
Talk to Us About Achieving Your Commercial Finance Goals
With nearly a century of commercial finance expertise, Cobb Cole’s business law team is equipped to assist your business with all its commercial finance needs. Our legacy combines decades of traditional wisdom with modern legal strategies, making us a trusted business partner who can help you navigate everything from lease financing to secured real estate loans.
We don’t just provide legal services; we build partnerships. Whether you want to optimize your company’s asset utilization without the burden of ownership or restructure debt, we expertly guide you through intricate financial arrangements, ensuring your financial goals are met with prudence and legal foresight. We craft bespoke remedies that help Central Florida businesses navigate through turbulent times, setting them on a path to recovery and growth. We understand the unique challenges and opportunities in commercial finance and are committed to helping our clients achieve their objectives with strategic, legally sound, and innovative solutions.