According to the lender’s website, its services are best suited for companies falling “outside the traditional credit industry box.” Middle-market lessors seeking liquidity for providing equipment financing to clients who fail to meet the qualification requirements of traditional lenders can work with 36th Street Capital to find workable solutions.
36th Street Capital was founded in 2014 by Mark Horan and Kiran Kapur. As co-founders, the two sought to create a source of specialty financing for companies with nontraditional credit histories. Building on a “network of alternative capital sources,” the two established a new lending company with the liquidity to provide funding solutions to equipment lessors and lessees in a variety of traditional, modern and high-risk industries.
Currently headquartered in New Jersey, 36th Street Capital has managed over $3 billion in equipment costs and continues to help lessors provide the funding their clients need to move beyond financial difficulties and experience growth. In 2015, the lender entered into a joint venture with investment management firm Tennenbaum Capital to further its goal of helping clients provide high-quality service to their business customers. The company brings over 65 years of combined experience in equipment financing, capital markets and diversified manufacturing to the alternative lending sector, and this expertise makes it possible to secure critical funding for businesses with strong company stories regardless of past financial challenges.
Every business has a story behind its financial status, and lessors come to 36th Street Capital on behalf of clients with the most interesting and challenging backgrounds. Rather than creating a cutoff point for eligibility based on a FICO score, this lender examines the full story of each company and looks for ways to make growth possible despite past struggles. The 36th Street Capital website makes it plain their goal is to understand what companies have been through and respond with appropriate financing options.
The types of businesses for which 36th Street Capital secures funding are those considered high risk by traditional lending institutions. The lessors, private equity firms and advisory firms that come to this lender are seeking alternative solutions for their clients but may not have the liquidity necessary to extend an unsecured loan. 36th Street Capital uses its own balance sheet capital to make it possible for struggling businesses to obtain the equipment they need to keep moving forward.
Businesses with nontraditional credit records are often passed over by other lenders, and lessors aren’t always willing to take on the risk involved in extending equipment financing to a company lacking the financial stability to guarantee it won’t default. Funding from 36th Street Capital lowers the risk and supports the ability of mid-market loan originators to service clients with a wide range of needs.
The lessors and firms serviced by 36th Street Capital works offer equipment leases to clients in diverse markets, including:
For companies in these sectors, high-quality modern equipment is necessary to provide the best service and to maintain an edge over the competition. When inadequate cash flow or poor credit stands in the way of growth, 36th Street Capital is there to offer liquidity and secure essential funding.
Even when finances are stable, industries like construction, mining, agriculture and certain sectors of entertainment may be viewed as too risky by traditional lenders. This is due in part to the nature of the risks faced by companies in these sectors. Accidents, injuries and cultural shifts are unpredictable and can turn a prosperous company into one facing bankruptcy almost overnight. Lenders are often unwilling to assume the risk involved in lease agreements when the possibility of a client defaulting or going under is high.
The structure of 36th Street Financial allows it to work with companies whose clients fall into unique or risky categories. Given the lack of willingness among traditional lease providers to consider equipment financing for industries where questionable credit and unstable cash flow is common, the lender has positioned itself to be an alternative for companies whose best chance for growth is to have a lease provider ready to support them as they get back on their feet.
Terms for funding from 36th Street Capital range from 12 to 60 months, making it one of the more generous lenders in the alternative financing sector. However, because the deals it funds are often in the millions of dollars, even lengthy terms can require large payments.
The way lending agreements work through lessors compensates for what may otherwise be an overwhelming payment schedule. Companies partnering with 36th Street Capital provide equipment to multiple clients, use the money from the lender to establish funding deals and have the income from these lease agreements to pay back the loan within the given terms.
Companies in need of liquidity to fund unique or difficult equipment financing transactions for their clients must contact 36th Street Capital to start the process. Unlike lenders providing equipment funding directly to businesses, 36th Street Capital doesn’t have a free quote form, prequalification option or online application, nor does it provide information regarding eligibility requirements for its services.
36th Street Capital works with private equity firms and advisory firms as well as independent, captive and bank lessors. Ideal customers are those whose clients have financial needs falling outside the scope of traditional lenders’ offerings due to poor credit, unstable financial histories or unusual needs. By working with a financing partner experienced in nontraditional funding, 36th Street Capital is able to provide personalized financing solutions based on the distinctive background stories of businesses in need.
Equipment lease providers in the alternative sector have similar basic requirements for their application and approval processes. In addition to completing an application form, customers are usually asked to submit one or more of the following:
It’s typical for larger loan amounts to require more documentation, such as additional financial paperwork or details of existing loans and leases. Because 36th Street Capital funds significant deals in high-risk industries and wants to know the full stories behind the companies it helps, it’s safe to assume the lender prefers a more detailed history at the time of application. However, the company also seeks to maintain reasonable turnaround times despite the potential challenges of lending to businesses with “storied” credit.
Rates for funding from this lender aren’t stated on its website. Companies seeking additional funding to back equipment leases for their clients can call 36th Street Capital or submit a question using an online form.
Businesses with questionable credit often rely on loans for support in times of slow cash flow or to cover unforeseen expenses. Although 36th Street Capital doesn’t specify whether it approves of extending leases to companies already carrying other financial obligations, its focus on helping businesses get back on their feet suggests the practice of stacking may be acceptable. The lender gives no indication of being risk-averse, nor does the language on its website suggest it turns down lessors that approve of stacking among their own clients. Each company story appears to be considered based on the needs and potential of the business rather than its financial status.
No document processing fees are listed or discussed.
36th Street Capital works with a variety of origination partners, so fee structures are likely to vary for the clients of these companies. No origination fee for the lender’s own services is listed.
Renewal for funding deals isn’t mentioned on the 36th Street Capital website, but it’s common for alternative lenders to provide renewal options, such as considering an application for additional funding once 50 percent of a loan has been paid off. Some lenders take a different approach and re-evaluate customers’ qualifications at the end of a loan’s terms to determine if they’re eligible for lower rates or a more generous payback period.
Since this lender’s customers consist of companies providing equipment to clients, renewal options may be a part of their lease agreements. In these cases, details would vary depending on the policies of the lessor. Equipment leases generally end with the lessee purchasing the equipment or entering into a new lease agreement in order to obtain an updated model.
Because information on interest or buy rates for 36th Street Capitals financial products is unavailable, companies seeking their unique type of funding must contact the lender for information regarding interest forgiveness. Interest rates and payment structures offered by lessors once a loan from 36th Street Capital has been obtained are dependent on the companies’ policies.
Alternative loan providers lending directly to businesses may offer discounts for paying off loans early or may do the opposite and charge a prepayment penalty. Those providing interest forgiveness allow companies to pay off the loan before the end of the terms without being under obligation to cover the cost of interest for the entire term period.
Funding from 36th Street Capital is meant to be used by lessors to provide equipment financing to their clients. The lender has designed its loan services to make it possible for companies to service high-risk industries without assuming too much of the risk themselves or having to turn away clients in need due to a lack of available assets.
36th Street Capital will back the following types of leases:
This allows its customers to provide a variety of lease options to their clients so that these businesses can continue to offer the high quality of service necessary to grow and have a second chance at success.
Common equipment types backed by 36th Street Capital’s loan products include:
By working with such a wide range of industries, this lender ensures companies providing diverse services have a chance to regain ground lost during times of financial hardship and move forward even after being rejected by other lenders.
Neither 36th Street Capital nor its joint venture partner, Tennenbaum Capital, have any public feedback from clients at the time of this writing. Most of the available information on the lender is in the form of press releases and short articles discussing its lending activities. These details confirm the company’s ability to secure large loans for businesses in many industries and highlight its willingness to help lessees with imperfect credit histories or difficult financial circumstances.
36th Street Capital is not currently licensed or accredited by any third parties. However, the lender has been featured several times on Monitor Daily and provides a list of press links on its website for those interested in learning more about its services.
About Theresa HoughtonTheresa "Sam" Houghton is a wellness consultant and freelance writer from Upstate NY. With more than half a decade of experience in the business world, Theresa understands the unique challenges small business owners face in highly competitive markets. Her experience with researching and writing positions her to provide solid advice and high-quality content on a variety of topics. When she's not writing or helping people get on track to better health, Theresa likes to read the Bible, play humorous card games and knit socks. You can learn more about Theresa's wellness consulting services at GreenGutWellness.com and connect with her on LinkedIn.