Client Objective:

A rapidly growing cold storage and logistics company sought capital to expand its temperature-controlled warehousing footprint and modernize its material handling infrastructure. The operator had secured several new long-term distribution contracts with national food producers and required new refrigeration systems, racking, and logistics equipment to meet rising demand. Secure Capital was engaged to design a financing solution that balanced speed, scalability, and long-term capital efficiency.

Key Considerations:

• Total Facility: $17MM USD structured across multiple tranches to align with phased buildout and equipment delivery timelines.
• The project included high-capacity ammonia-based refrigeration units, automated pallet-handling systems, and energy-efficient upgrades to existing warehouse infrastructure.
• The client required a structure that preserved working capital while enabling rapid deployment of equipment to meet incoming contract obligations.
• Real estate ownership was separated from equipment operations, requiring Secure Capital to integrate both asset classes under a unified financing framework.
• Future expansion plans included additional satellite facilities, necessitating a repeatable and scalable capital structure for subsequent phases.

Financing Structure:

• Structure: Hybrid equipment and facility financing combining term debt and operating leases.
• Total Facility Size: $17,000,000
• Term: 72 months with flexible end-of-term purchase and refinance options.
• Funding Method: Direct vendor payments and progress-based draws tied to construction and commissioning milestones.
• Collateral: Refrigeration systems, racking, forklifts, and backup power assets installed at two distribution centers.
• Key Features:
– Tiered drawdown schedule aligned with equipment installation to minimize interest carry.
– Covenant-light design emphasizing operational continuity and liquidity preservation.
– Structured residual value mechanism allowing the operator to re-acquire core assets at favorable terms upon maturity.
– Integrated both real asset financing and operating equipment leases under a single facility for administrative efficiency.

Results:

• $17MM facility deployed within 90 days, enabling the operator to complete its cold storage expansion on schedule and commence new distribution contracts ahead of peak season.
• Increased cold storage capacity by over 40%, supporting both inbound food logistics and last-mile delivery contracts.
• Achieved a 25% reduction in monthly payment obligations compared to conventional financing structures through balloon and residual optimization.
• Improved operational efficiency with new automation and energy-efficient systems, lowering utility costs and enhancing ESG performance.
• Secure Capital’s solution provided a scalable financing platform for continued regional growth, positioning the operator as a key logistics partner in the temperature-controlled supply chain sector.