Coronavirus Resource Center

Commercial Finance & Lending

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With the unique level of economic dislocation created by the COVID-19 pandemic, as well as the complex circumstances emerging from government responses, lenders and their commercial borrower clients will need to adopt a more comprehensive strategic outlook for their respective businesses.  Our Commercial Finance and Lending practice routinely acts for international, federal- and state-chartered banks, investment banks, commercial and specialty finance providers, alternative lenders including credit and hedge funds, credit insurers, and investors. We are particularly known for our strength in the areas of domestic and cross-border asset-based lending (including equipment, inventory and receivables finance), factoring arrangements, healthcare, energy, hospitality, IP finance, DIP and acquisition finance.  Conversely, our borrower clients are active in a broad spectrum of industries and range from large, publicly traded and privately-held portfolio corporations to smaller closely-held and family-owned companies, to startup enterprises.

Areas in which we are actively assisting our clients include:

  • Counseling on issues, including inter-creditor arrangements applicable to incoming and incumbent lenders, arising out of COVID -19 government-backed emergency business loan legislation
  • Counseling business clients on eligibility for, and compliance with, COVID -19 government-backed emergency business loan legislation
  • Review and revise template master invoice and master accounts receivable facility agreements together with ancillary documents 
  • Providing legal support for lenders and borrowers dealing with the implications of business interruption arising from COVID-19 lockdowns on cash flow in various jurisdictions, including:
    • Covenant waivers
    • Forbearance arrangements
    • Facility restructurings, amendments and restatements
  • Contract and collateral lien confirmation and security reviews
  • Cross-border factoring issues arising under the “two-factor system”
  • Insolvency and debt restructuring, including:
    • Acceleration and collateral enforcement, with particular expertise in navigating recent restrictions on lender remedies introduced in multiple jurisdictions to protect businesses that may be adversely impacted by COVID-19, such as the new UK moratorium
    • Dealing with partial releases and repayments where businesses are able to make strategic disposals of non-core assets to rebase their leverage to more serviceable levels for the duration of the pandemic
    • Negotiating and dealing with insolvency officials on behalf of secured lenders internationally
    • Debt disputes, including collect-outs for receivables financiers and credit insurance disputes
    • Losses arising from fraud by businesses and managers, including fresh-air invoicing
  • Assisting lenders and borrowers entering into new financial arrangements despite the difficulties imposed by the pandemic, including:
    • Drafting and negotiating standard and customized debt facility/security documentation
    • Post-closing monitoring and covenant review
  • Supply chain risk and advisory service
  • In-house customized training and education for lenders, including training on implementation of government-backed emergency loan legislation and business interruption grants and issues facing borrowers struggling with the financial consequences of  COVID-19.

Representative Engagements:

  • Preparing CBILS (UK Coronavirus Business Interruption Loan Scheme) invoice finance top-up and term loan credit agreement templates for a newly-accredited CBILS asset-based lending subsidiary of an international bank.
  • Advising a major international credit insurer in negotiating and implementing a back-up servicing agreement in respect of a trade receivables securitization, triggered by the credit downgrading of a pan-European issuer as a direct consequence of the COVID-19 pandemic.
  • Advising a leading UK asset-based lender on structuring proposed £100MM syndicated ABL facilities to be made available to a global brand retail chain in the UK, US and Europe, designed to support its working capital requirements while it reopens stores as each of its locations emerge from COVID-19 lockdown.  Our advice extends to considering the impact of upcoming changes to UK insolvency laws (designed to protect businesses suffering economically from the COVID-19 pandemic) on the rights of secured lenders in regards to retail inventory as a floating charge asset.
  • Representation of a senior secured bank lender in connection with an $80 million asset-based revolving loan, term loan and letter of credit facility to an agricultural cooperative included an amended and restated transaction to include COVID-19 applicable covenants and to allow for COVID-19 related financing
  • Advised an asset-based lender on the provision of £30 million receivables and inventory finance facilities to the operator of duty free and luxury goods stores onboard cruise liners, including providing ongoing legal support as the lender and borrower seek to restructure the facilities to help the business deal with the significant impact of the COVID-19 pandemic on the cruise line industry and travel-related sectors.
  • Advising the asset-based lending arm of a major US bank on its rights as secured lender in the insolvency of a supplier of packaged food products to household name coffee shop chains.  The rapid closure of these outlets in the COVID-19 lockdowns led to the almost-immediate failure of the borrower and necessitated a rapid and assertive legal response to preserve collateral for the lender and ensure a safe exit from its exposure.
  • Representation of an acquirer of a global metals processing company in its aggregate $500 million combined ABL and high-yield bond financing.
  • Representation of a global aerospace manufacturing company in connection with a $600 million revolving loan facility and a $100 million senior secured term loan.
  • Represented a private equity fund in connection with the purchase of loan from PNC Bank and amend and restate Loan Agreements with the manufacturer of frozen food items.
  • Representation of a senior secured bank lender in connection with a $35 million asset-based loan to a developer of educational curriculum materials.
  • Representation of a senior secured bank lender in connection with a $15 million revolving loan to a national fast casual restaurant chain.
  • Advised a major financial institution as agent and lead bank on behalf of a syndicate of senior and mezzanine lenders in relation to the restructuring and recovery of £265 million in asset-based loan facilities made available to British Steel. This work included negotiations with the UK government for initial financial support, followed by longer-term planning which resulted in a controlled liquidation by the Official Receiver and the ultimate sale of the business as a going concern to a trade buyer, preserving jobs and an important part of the UK’s strategic steel industry.
  • Advised an asset-based lender in connection with an amendment and restatement of £26.5 million existing asset-based loan facilities extended to members of a group of companies in the UK specialising in debt solutions.
  • Advised an asset-based lender in connection with the provision of £20 million super senior revolving credit facilities in relation to the acquisition of Marley, Ltd. by Inflexion Private Equity.
  • Advising an asset-based lender as provider of £30 million ABL facilities in connection with the acquisition from British Telecommunications PLC of BT Fleet, a provider of fleet management solutions, vehicle maintenance, and accident management services.
  • Acted for the Petra Group in putting in place a new facility of £10 million to refinance an existing facility.

Attorney Contacts by Practice and Industry, as well as our general inquiry email:  COVID-19@crowell.com

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Crowell & Moring LLP is an international law firm with more than 500 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity. The firm has offices in Washington, DC, New York, Los Angeles, San Francisco, Orange County, London, Brussels, and Shanghai.

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