BuildDirect Bolsters Liquidity: Secures C$9.526M Revolving Credit Facilities
Monday, Dec 23, 2024 7:35 pm ET
4min read BuildDirect.com Technologies Inc. (TSXV: BILD) has secured a significant financial boost with the acquisition of C$9.526 million in revolving credit facilities from Royal Bank of Canada (RBC). This strategic move, announced on March 15, 2006, provides BuildDirect with enhanced liquidity and financial flexibility to support its operations and growth initiatives.
The credit facilities, consisting of RBP Loans, RBUSBR Loans, Letters of Credit (LCs), and Letters of Guarantee (LGs), offer BuildDirect a borrowing limit of up to 75% of Good Accounts Receivable, 85% of Good EDC Accounts Receivable, and 25% of the lesser of cost or net realizable value of Unencumbered Inventory, up to a maximum of C$375,000. This facility, combined with other credit facilities such as a C$50,000 VISA Business and US$165,000 VISA Gold, strengthens BuildDirect's financial position and supports its growth initiatives.
The facility is subject to an arrangement fee of C$400 and a revolvement fee of C$100 per transaction. The interest rate for RBP Loans and RBUSBR Loans is RBP + 1.00%, while LCs and LGs have fees charged to the Borrower's accounts. The facility is repayable on demand, and the Borrower must maintain a minimum retained balance of C$0.00 for both RBP Loans and RBUSBR Loans.
This credit facility will provide BuildDirect with the necessary liquidity to support its operations and growth initiatives. The company's strong financial position, as evidenced by its low debt-to-equity ratio of 4.15 and positive cash flow, makes it an attractive investment opportunity.
BuildDirect's recent financial performance has been challenging, with a net loss of C$4.68 million in the last 12 months. However, the company has been working to improve its operations and reduce costs. The new credit facility from RBC, along with BuildDirect's ongoing efforts to enhance its financial position, could help the company achieve its long-term growth objectives.
Investors should monitor BuildDirect's progress in utilizing the new credit facility and its impact on the company's financial performance. As BuildDirect continues to execute its growth strategy, investors may want to consider the potential benefits of the new credit facility in their investment decisions.
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