About The Company

Houston, Texas-based provider of private fiber-optic connections to cities, municipalities and educational institutions across the state.

The Situation

Referred to us by a banker, our client stood out from typical referrals due to their substantial positive cash flow. The issue with this company was leverage from an eight-figure enterprise value loan given by the lending arm of a private credit fund. This loan led to leverage covenant violations at their existing bank.

With no choice but to exit, the bank called on Flatbay Capital to help with the takeout of their client’s owner-occupied commercial real estate loan.

The Solution!

We were able to secure a CRE bridge loan with an owner-occupied light industrial building, primarily used as a data center. The bridge loan paid off the internet company’s current banknote with Flatbay taking a 1st lien deed of trust.

Flatbay Capital BDO/Partner Ethan Clasen states, “This deal would not have been made possible without our referring bank partner. We are impressed by this business owner's strong company management and extensive business network. Though we are able to assist the company during a time of need, we anticipate our client will soon return to conventional bank financing.”

With the banknote paid off, the fiber internet company took steps to de-risk and grow the business by expanding into locations where they have experience and partnerships providing services instead of focusing on partnerships with major national providers.

The fiber internet company will become eligible for financing with a mainstream commercial bank in the future when leverage is reduced either by a debt-to-equity conversion or a reduction in the principal of the enterprise value loan.

A big thank you to our client for partnering with Flatbay Capital! We can’t wait to see your expected turnaround!