Solving tough financials problems with smart, measurable solutions has always been the goal for SC Capital Partners, an investment banking and professional services firm located in Irvine, Calif.
That was surely the case last spring when SC Capital Partners CEO and Managing Partner Steve Fryer and his team helped a thriving Southern California company working with the physically disabled achieve its goal of continuing to help the residents of these homes.
The company — Chino Hills-based People’s Care, which currently has around 35 living facilities with five to six occupants per home — was faced with a dilemma when the state of California closed a major state-owned facility in Pomona and soon, one in Costa Mesa.
“Those people have to have homes, and the good news is the State pays the costs because it’s a state law,” Fryer said. “So People’s Care had a problem because they had to expand very quickly to provide new homes for the displaced residents.”
“The CFO talked to a number of banks to raise the funds to obtain new homes without success.” Fryer continued. “The problem was a balance sheet that was already tight because of People’s Care’s rapid growth.”
Through a recommendation of business associate, SC Capital Partners was brought in to find a solution.
“We gathered all the data we needed and worked with them for several weeks,” Fryer said. “And we were able to come up with banks that had an interest in working with them because of the summary that we had put together.” Community Bank in Irvine understood the situation and felt comfortable because they had worked with SC Capital Partners in the past.
“People’s Care needed a credit line to make improvements but they also needed to take care of all the tenant improvements and that was stretching their financials a bit,” Fryer said. “But we were able to bring in a state program that would guarantee up to 75 percent of the bank loan.
“That was the key to getting the project done.”
In the end, SC Capital Partners came up with $5.3 million in financing for People’s Care at a low interest rate which reduced People’s overall costs dramatically.
“Absolutely it was very gratifying to see this one through,” Fryer said. “We really felt good to help a company like People’s Care. They were frustrated because they couldn’t expand their contracts with the state because they didn’t have a good way to borrow the money “
Fryer added: “That’s our business. We take on the tough ones. We have a couple of ex-bankers and accountants who know the different banks and know what they can do and can’t do.”
SC Capital Partners has been in existence for 12 years and the four-man team is led by Fryer and also includes, Jack Dignan, William Davey and Timothy Porter.
“We have a group that focuses on debt, and a group on the equity side,” Fryer said. “We are more focused on the debt side right now.”
Fryer said that banks are just now starting to lighten up a bit. “The Feds have been so tough with the banks and their lending practices,” he said. “A lot of the banks have been afraid to do anything. That’s why getting the People’s Care deal done was such a huge accomplishment for us.”
“I think the key is that we don’t take on a project unless we know we can get it done,” Fryer said. “We are not going to involve ourselves, our clients or potentials clients with a deal we cannot do. We don’t want to waste our time or our clients’ time or money. We focus on doing the job properly, not over-charging and always looking for a successful conclusion.”