Authored by Daniel Schweickle (Investment Director)
Key Takeaways:
- Capital must be wrapped around strategy: GCI’s approach centres on aligning capital solutions with the unique challenges and goals of each business.
- True partnership with the mid-market: From growth to turnaround, GCI works closely with management and advisors to co-create outcomes.
As a mid-market financier, we are fortunate to engage daily with business owners across a wide spectrum of industries. Some conversations revolve around enabling growth strategies and acquisitions; others focus on navigating recovery from ventures that fell short of expectations. Our most rewarding work often happens in the room with borrowers and their advisors, where we collaboratively workshop how to unlock the next chapter of their journey.
We understand that opportunity often presents itself at the most inopportune times. Our approach is to quickly grasp the challenges a business is facing and work to “wrap” our capital around the solution. We use the term “wrap” deliberately because capital alone isn’t the answer. The management team remains central to solving the problem and executing the strategy. Our role is to ensure the capital solution supports and enables the transformative outcome.
We see ourselves as true partners to the mid-market, offering a diverse range of strategies and funding solutions. Our teams collaborate closely to identify the most suitable capital solution for each business. A conversation might begin with our Asset Backed Finance team on Monday and evolve into a Strategic Capital discussion by Wednesday, with the shared goal of finding the right solution. No matter the starting point, the ethos across all GCI strategies remains consistent: delivering thoughtful, responsive support tailored to each situation. In uncertain times, we don’t wait for certainty, we help create it.
What have we been working on recently?
The mid-market continues to buzz with activity. Here is a snapshot of the recent discussions and opportunities we have been exploring:
- A Hybrid Facility for a Growing Business
A well-established and growing business recently found itself navigating between two incompatible lending models. On one hand, they were considering a traditional asset-backed loan, however, this failed to unlock sufficient capital. On the other, a pure cashflow based facility placed too much emphasis on historical performance, which failed to recognise recent wins.
To address this, we designed a hybrid facility anchored in the business’ asset base, but with the agility to extend funding against near term cashflows. This approach delivered capital that was aligned with the business’ growth trajectory and tailored to meet its evolving needs.
- Unlocking Liquidity from Privately Held Equity
There’s often a gap between vendor and buyer expectations, which may result in founders or shareholders needing to hold longer than anticipated. In many cases, sale discussions begin when the founder or shareholder is seeking liquidity to pursue other ventures.
GCI can provide funding secured against private equity holdings, enabling owners to pursue growth or strategic objectives without dilution or forced exits. We have provided liquidity to a major shareholder who was unable to receive distributions due to an ongoing dispute with another shareholder. We have also supported founders seeking liquidity when their exit opportunities were delayed by factors beyond their control and unrelated to the underlying value of their business.
These transactions have spanned enterprise values across the full spectrum of the mid-market: from $30 million to over $300 million. We continue to be actively engaged in discussions to provide more facilities to founders and shareholders in similar situations.
- Resolving ATO Tax Debt to Enable Turnaround
Overdue ATO debt continues to pose a significant challenge for many businesses. These legacy liabilities can be highly problematic, particularly when Director Penalty Notices (DPNs) or recovery actions come into play.
When engaging with businesses facing these challenges, our priority is to identify a pathway that removes the tax burden and restores a stable financial foundation. This often requires restructuring the capital base, with a single, flexible financier capable of supporting the turnaround.
One sector currently under considerable strain is transport. Operating costs (i.e. fuel, insurance, rent, and maintenance) have risen sharply, yet many businesses lack the pricing power to pass these increases on to customers. Competitive market conditions and limited bargaining leverage have left operators squeezed. For some operators, particularly those with older or less valuable fleets, the available asset base may not be sufficient to support traditional refinancing options.
We dedicate time to understanding and validating each turnaround strategy, working closely with management and their advisors to ensure there is a credible and achievable path forward.
Working with us
Whether we are supporting the next phase of growth or assisting a business under stress, the consistent thread across all our engagements is our approach: we partner closely with management teams and their advisors, wrapping our capital around the situation to help deliver a transformative outcome.
Whether you are a business owner, an advisor, or another capital provider who sees alignment in values and outcomes, we are always excited to have a conversation. The earlier we are brought into a situation, the more options we can explore together. And often, that’s where the best outcomes are created.