Our Corporate Finance Team

General Advisory - Al DeCuir, Todd Smith

After stellar institutional careers, both Al DeCuir and Todd Smith have spent the past ten to twenty years advising middle market companies on their capital and growth needs. Todd has more recently specialized in the subsidy programs emerging from the SBA and Washington, D.C. He is closely associated with a prominent Federally Chartered Certified Development Company ("CDC"). At Todd's website you may review specific current programs. Todd's special attention to this sector is a key component of tapping into the new subsidy programs that were established to assist small businesses to survive and grow during the currently difficult economic times. Al is skilled at assessing the needs of companies "on both sides of the balance sheet" and, together with the members of the GCaps team, our group has in place the professionals, with a broad and comprehensive knowledge base, positioned to address every challenge that our clients bring us.

Investment Banking

Accessing the capital markets through public vehicles or even institutional "Wall Street" sources has become more and more difficult, as many funds have retrenched from portfolio problems, and investment houses focus on increasingly larger minimum size transactions. GCaps has made it a priority to keep close ties to those firms who specialize in true middle market transactions that may not yet have a Fortune 1000 status, but do demonstrate the potential of getting there. A couple of examples of such firms include a newly-formed group that spun out of Ladenburg Thalmann, headed by James Cassel, Cassel Salpeter & Co. Another spin-off of an old line firm, Jessup & Lamont, is Aegis Capital, headed by Ed Cabrera (www.aegiscap.com). Both of these firms think "out of the box" and can give all of the service of a major Wall Street investment bank securities firm.

Capital Equipment

Asset based lending, equipment leasing and financing, and medical industry financing, signature loans, revolving lines of credit, and international financing that includes export credit insurance and guarantees, are all specialty areas of Clearlake Financial Corp., based in Davie, Florida, where Ron Epstein and Richard Kaplan are our points of contact. Ron Epstein's relationships go back fifty years and his firm is active in general equipment as well as in such specialty fields as healthcare. Richard Kaplan is also a CPA, with a strong background in real estate development. In addition, our team taps into the strength of Alex Evronov and his partner, William Schneider of Commercial Resources Corp. (http://commercialrc.com). Alex has founded several major financial firms specializing in equipment finance, and literally "wrote the book" on credit.

Working Capital

From "Wall Street to Main Street" has been the path that created Harborcove Financial. Russell Hackmann, President, and Harvey Gross, Senior Vice President, joined two other entrepreneurs in forming this factoring firm with a business model designed especially to work with small businesses. Mr. Gross is well-known in the field of asset based lending for his position as Chairman of the New York Institute of Credit (NYIC) and as a former board member at the Turnaround Management Association (and head of the New Jersey Chapter). Mr. Hackmann, following several years at Lehman Brothers, led a team of equity derivatives brokers at insurance giant Swiss Re. The formation of Harborcove marked Harvey Gross' return to the world of factoring, and the partnership of Mr. Hackmann and his Swiss Re associate Simina Kroculick brought the needed startup funding. Today, the team considers everything from purchase orders, receivables, and inventory financing, and their medical receivables brand can be found at www.HarborcoveHealthcare.com. In healthcare, Harborcove provides "essential liquidity" to healthcare providers, understands the complexities of billing, monitoring, and collecting medical receivables, offers receivables financing facilities on a bridge or longer term basis, and provides rapid access to cash "trapped" in eligible accounts receivable.

Typical Transactions

Company A - This small manufacturer "survived" the downturn of 2008, but incurred some losses during this period. It is now back in a growth mode, with a backlog of orders, but its bank will not extend credit. Its margins are not sufficient to satisfy this need by asset based lending alone (at 15-18% cost). It has some equity in its owner-occupied building, but that is also insufficient to do anything but take the bank out. GCaps brought in Royce Capital in combination with Harborcove Financial to achieve a blended rate in the 12% range by utilizing subsidized SBA programs.

Company B - This stellar company grew from zero employees (as a startup) to more than 400 over the past four years (right in the midst of a recession). It achieved that despite the limitations of small capitalization and restrictive bank line. One of the true success stories in the U.S. automotive industry nearly went bankrupt, not due to its own efforts, but rather the rigidity and illiquidity of the banking system. GCaps found institutions willing to address and solve the "problems" of foreign receivables and non-notification, along with solutions to some subordination issues. The company now has up to $30 million availability instead of a $2 million "out of compliance" line.

Company C - This public company, with $100 million market cap, opportunistically purchased its supplier at a discount to asset value. However, the inventory was "across the border" in Mexico. This kicked it out of the borrowing base of most asset based lenders. In this case, GCaps brought in a "one stop shopping" mezzanine fund, with a "sister" equity growth fund to take care of both needs at once.

Company D - This staffing company ran into cash flow problems over the last few years (not unlike 90% of the market) and its bank "allowed" an over-advance of about 20%. However, now the bank is having its own capital problems and is "forcing" term out of 50% of the line under a forbearance agreement. Had GCaps been brought in sooner, we would have been able to avoid the forbearance and hence the exclusion of an SBA program solution/takeout. In the alternative, we negotiated terms with competing asset based lenders to minimize the downside of "bridge financing" plus a settlement with the bank. The end of the "bridge" will be an SBA facility takeout.

The above examples have one thing in common: creativity, financial engineering, and thinking "outside the box." With such attributes, the GCaps team and our associated corporate finance professionals are prepared to help meet your unique circumstances.