First Capital Boosts Loans by $330M

Stephen Hall’s Best Security Industries boosted its credit line with help from First Capital.

Highlighting the huge market for business lending beyond traditional banks, Boca Raton-based First Capital has made $330 million in loans in the past year.

Those working capital loans went to companies in a variety of industries, from manufacturers to wholesalers to suppliers, and $50 million of the new loans were made in Florida, said Chris Collins, VP and business development officer with First Capital. The growth has brought the company to $875 million in assets under management, most of them loans.

“We hope we will keep growing at this rate if the business market keeps growing the way it has been,” Collins said. “Everybody understands that we have the capital to put on the street and you can actually get the money.”

The company received capital to grow a year ago with a $139 million investment by Miami-based H.I.G. Capital, which owns a majority stake in the firm, along with JPMorgan Chase and Morgan Stanley.

First Capital recently renewed its $150 million senior credit facility with Germany’s DZ Bank.

While First Capital depends on banks for support, its clients are going the other route. Stephen Hall, CEO and president of Delray Beach-based Best Security Industries, said his merchandise alarm tag company was looking to boost its $4 million line of credit with TD Bank to $7 million so it could complete an acquisition.

“We found traditional banking was in this morass of being afraid to move in any direction because of new the financial requirements,” Hall said. “It has become an overregulated industry.”

He ended up doing the deal with First Capital by using the company’s receivables and inventory levels as collateral. The company closed on the purchase of $6 million-revenue business in March. Now, Best Security expects to generate $20 million a year in revenue, Hall said.

Collins said First Capital often works faster than traditional banks, so companies with deals on the table can close on time.

Of course, some banks have become more aggressive in making working capital loans as the economy improves and regulators pressure banks to shift their portfolios away from real estate loans. JPMorgan Chase, Miami Lakes-based BankUnited and Coral Gables-based Mercantil Commercebank are among the banks that have emphasized this line of business.