We leverage our real estate and insolvency experience to provide loans to clients that are in a formal insolvency process (such as Companies’ Creditors Arrangement Act (CCAA) or Receivership proceedings) or informal turnaround or restructuring situations.
Comprehensive and Custom-Tailored Loans:
- Restructuring or turnaround situations
- Debt consolidation
- Tax arrears
- Shareholder dispute
- Distressed debt (special loans)
- Estate litigation proceedings or to fund the estate trustee during litigation proceedings
- Receivership (receiver certificates)
- Debtor-in-possession financing (DIP)
- Bankruptcy (trustee certificates)
Although our alternative financing loans are mainly real estate based, we may consider allowing a higher loan to value on real estate if there are other assets we can leverage against. For instance, we can also loan against the forced liquidation value of equipment.
When is a Loan or Asset Distressed?
- Monetary default such as arrears
- Technical default such as insurance issues, property tax arrears, etc.
- CRA issues (income tax, HST, etc.)
- Mortgage is past maturity with no renewal option
- Lender has called the loan or commenced enforcement proceedings
- Breach of financial covenants
Timing is Critical
A proactive approach is the key to successful loan workouts. It’s best to speak with the lender on the current loan to develop a plan before they take action, however, in many cases we can help the borrower with a short-term bridge, workout strategy. Hillmount Capital has flexibility to help in situations where banks, trust companies, and credit unions cannot due to regulations that restrict their offerings.
We’re able to provide quick funding in both proactive and reactive situations.
How We Help
Our team reviews every aspect of the situation, including the terms of the distressed loan(s), cashflow projections, assets and liabilities, balance sheet structure, management and operational conditions, and other factors that pertain to the situation.
Following our review, we find ways to:
- Refinance the distressed loan with a bridge or short-term loan to protect the property
- Provide pre-paid loans to free up cash flow for the term of the loan
- Provide an interest-only loan that will reduce monthly payments and improve cash flow
- Leverage high-value personal property where the real estate equity is insufficient
- Provide debtor-in-possession (DIP) financing during formal insolvency proceedings
- Provide bridge or short-term loans following a formal insolvency proceeding
- Provide stalking-horse bid funding on real property and other assets
Hillmount Capital works with borrowers, lenders, and legal professionals to explore workout strategies in distressed situations. Ultimately, our goal is to align our loan with the borrower’s needs and provide them with a clear exit strategy for future success.
Learn more about our services.