Celtic Capital provides $1.1M asset-based facility to Pacific packaging distributor
What's the deal? Celtic Capital Corporation has extended $1.1 million in credit to a Pacific-based distributor of shrink wrap and other packaging supplies. The facility comprises an $800,000 accounts receivable line of credit and US$194.1K inventory line of credit.
The funds will pay off the distributor's existing bank debt in full and provide additional working capital to support growth.
Why now? The distributor violated loan covenants with its previous bank, which then asked it to find alternative financing. A third-party referral connected the company with Celtic Capital.
What could go wrong? A covenant violation signals underlying financial stress. While the new credit lines offer breathing room, the distributor still needs to stabilise its operations and demonstrate it can service the debt — this time under an asset-based lending structure rather than traditional bank financing.
The signal: This deal underscores a familiar dynamic in asset-based lending: when traditional banks enforce covenant breaches and exit relationships, specialist lenders step in with structures secured against receivables and inventory rather than broad financial performance metrics. With packaging distribution closely tied to manufacturing and logistics cycles, the distributor's need for fresh working capital may also reflect wider margin pressure across supply-chain-dependent sectors.
Read more: sfnet.com
