Contract Financing Case Studies

Tomato Bin

#1 - A supplier of 300 gallon wooden produce bins entered into multiple supply agreements with a number of large tomato processors to supply bins for tomato paste, then store and repair bins during the winter and return them for fill in the spring. Stalwart initially negotiated a “bin fill agreement” that included a sale leaseback of existing bins owned by the processors, this got that asset off the processors balance sheet. A minimum number of fills was agreed to by the parties, the revenue from the minimum was assigned to Stalwart. Stalwart paid the vendor on multiple schedules totaling over $100 Million. Both the vendor and the broker retired rich men.

Satellite Broadcast Network

#2 – A small public company that manages satellite broadcast networks was awarded a 3 year service contract with a large bank to provide management services for 2000 of the bank branches. The satellite management company needed to supply processors and rooftop antennas in addition to service. They had a 3 year contract to which, by addendum, we added Stalwarts proprietary language that allowed a minimum payment to be assigned to Stalwart. The PV of the minimum payment gave the company funds for the equipment plus working capital.

They tried to raise equity and debt for the contract but failed after many attempts. Stalwart’s help kept them out of bankruptcy and enabled the bank to keep the transaction as a fully off balance sheet service expense.

Woodchips as Biomass Energy

#3 – A 50 year old environmental consulting and management firm formed a startup joint venture with a manufacturer of biomass energy production equipment. They were opening a facility to produce biomass energy materials (woodchips) which were under contract to be sold to a large, multi-national energy company. By addendum to the already negotiated contract, we built in a minimum volume purchase requirement which formed the fixed payment stream to be assigned to Stalwart.  We also added Stalwarts proprietary language giving the end user a discount on the purchase price as an inducement to the volume requirement as well as certain rights in the equipment usage upon a lessee default. As projects of this nature are extremely capital intensive, the ability to monetize the contract enabled the startup Lessee to avoid much more costly forms of venture capital or equity to acquire this essential, revenue producing equipment.

Data Center

#4 – A four year old commercial real estate company that designs and builds data centers has a large investment grade tenant requesting substantial tenant improvements (TI) to the facility totaling in excess of $15 Million consisting of power generators, HVAC, security, cooling and data center equipment. Investment grade tenant signed a 15 year lease for the space with an early termination option at the 10 year mark. Stalwart worked our proprietary language into the real estate lease contract, so the customer has just one rent payment to make. Stalwart advanced on the TI portion and forwards the “rent” portion to the landlord monthly.

Biowaste to Energy Plant

#5 – The developer of a proposed bio-waste to energy plant needed funders. Stalwart created a Power Purchase Agreement that required the rural utility that was buying the power to guarantee a minimum payment. Stalwartapproved the term transaction and worked with the Project Finance group of a large reinsurer to provide the construction funding.