The New Equipment Finance Subsidiary Of First Certificate Bank Essay

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We’re back to consider another transaction for credit approval. This one caused some spirited debate. I have changed the names and circumstances for this example and I’ve simplified the presentation to fit this article length.
Borrower: PimerMed Products, Inc.
Lender: The new equipment finance subsidiary of First Certificate Bank (FCB), a local $2.2 billion bank
Relationship: No previous/existing relationship with the bank but PimerMed is an attractive bank prospect for FCB
Amount: $6MM
Equipment: primary manufacturing equipment for expansion and efficiency
Term: 60 Month capital lease
Pricing: 4% yield (a below average spread for FCB)
Overview:
PimerMed is a $110MM specialized cardio medical device manufacturer started in 1985 by Gerald Pimer, current Chairman, CEO and 100% shareholder. Mr. Pimer is a well-respected executive in the industry but his daughter is now actively managing the business. The company is considered to be one of the top 3 privately held companies in its segment. Trends are positive for sales growth and cash flow, but the growth has slowed substantially in recent years.
Mr. Pimer personally has significant real estate interests. His net worth is estimated to be in the $15MM range with personal debt of approximately $25MM. He no longer offers his personal guaranty for new PimerMed obligations.
Financial Highlights:
PimerMed is a $110MM revenue company. The business has a diverse customer base with both long time and recently acquired clients. No single

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