By K2 Capital | October 27, 2025 | Asset-based lending, owner-occupied commercial real estate, working capital line of credit
Recent Example
An industrial manufacturer owned its facility outright. The company had grown steadily and built substantial equity in the property, but a surge in new contracts created a temporary working capital strain. Their bank was supportive but limited by traditional leverage and covenant structures.
Rather than wait through a long credit process or dilute ownership, the business used the equity in its facility to secure an asset-based credit structure anchored by the real estate. The financing included a term loan secured by the property along with a revolving line that could be drawn as production ramped up.
The result was immediate access to working capital without disrupting operations or requiring a complicated recapitalization.
How It Works
The structure is typically a real estate term loan that can be paired with a revolving working capital line. The term loan is structured as a three-year balloon with amortization based on 20 to 25 years. Monthly payments with limited financial covenants.
This approach works well for business owners acquiring their operating facility when bank financing is unavailable, companies with temporary earnings compression due to growth or reinvestment, and operators seeking to convert lease payments into long-term ownership.
When a business owns its facility and has meaningful equity in the property, that real estate can serve as the foundation for flexible financing that grows alongside the operating business.
| Loan Size | $1,000,000 to $15,000,000 |
|---|---|
| Collateral | Owner-occupied commercial real estate supporting an operating business |
| Property Types | Manufacturing facilities, office buildings, warehouses, distribution centers, specialized industrial properties |
| Geography | Nationwide with focus on mid to larger size cities |
| Structure | Real estate term loan that can be paired with a revolving working capital line |
| Term Loan | Three-year balloon with 20 to 25 year amortization; monthly payments with limited financial covenants |
| Typical Situations | Business owners acquiring their operating facility when bank financing is unavailable; companies with temporary earnings compression due to growth; operators converting lease payments to ownership; situations where real estate value supports financing but business metrics do not meet traditional bank standards Business owners acquiring their operating facility when bank financing is unavailable; companies with temporary earnings compression due to growth; operators converting lease payments to ownership; situations where real estate value supports financing but business metrics do not meet traditional bank standards |