THE BORROWER | United Pallet Services, Inc. (“United Pallet”) is a 26-year-old California provider of new and custom pallets, recycled pallets, combo/hybrid pallets, and pallet logistic services. Additionally, United Pallet offers pallet design, repair, on-site sorting, delivery, and heat-treating services. Wayne Randall, Owner and President of United Pallet Services, Inc., has been in the pallet business since 1985. Since then, it has grown to over 140 employees and is shipping between 15,000-20,000 pallets a day.  In 2012, Mr. Randall came up with the idea for Pointguard, a molded plastics pallet protector designed to extend the life of a wooden pallet by up to 15x, and spent the next few years developing it and bringing it to the market.

THE CHALLENGE | United Pallet invested a lot of time and money into the research and development of Pointguard. As United Pallet sought to refinance existing debt to free up capital for growth, the borrower encountered resistance largely due to investment in Pointguard and its ancillary effect on free cashflow. The challenge, simply put, was to find a lender willing to understand past business decisions and further United Pallet’s charted path for future growth.

THE SOLUTION | Enter Stonebriar Commercial Finance, and more specifically, its Real Estate Group (“SCF REG”). When SCF REG’s partners at TMC Financing (“TMC”) introduced this project, SCF REG immediately understood why traditional lenders had been boxed in by the some of the investment choices made by the borrower. The cashflow was impacted by the development of Pointguard, but that was not the full story. “Now that Pointguard was completed, we at SCF REG were able to consider business cashflow outside the effect of the R&D expenses incurred,” Travis Bell, Loan Officer for SCF REG, recalled. “SCF enjoys the benefit of existing outside of traditional bank regulations, and as a result our belief in the management team and business as a whole is a vital element of each credit decision. We have found that understanding who we are in business with is just as important as the financial metrics involved.”

THE RESULTS | SCF REG provided $2.7MM of long-term financing to allow the business to reorganize its balance sheet, which included providing additional working capital, to put the business in a position to take full advantage of the new product it developed and begin growing again. Curtis Valenzuela, EVP, Sr. Managing Director of SCF REG, stated, “This transaction is particularly gratifying as it demonstrates our value proposition for creditworthy borrowers that need a lender to understand and get behind their plans and not simply a bank that plugs in numbers to make a credit decision. We view our clients as investments and, therefore, take the view that the success of the underlying business is central to a successful outcome. In other words, we succeed when you succeed.”

For more information contact:

Ryan Ellis, Director 972.658.5136
Travis Bell, Commercial Loan Officer 972.896.9596
Nick Wall, Commercial Loan Officer 214.385.0969

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