Holding Company · Capital Strategy

Path to the Trench

Financing Stages · Traditional → Private Credit → Equity → Formal PE
Stage I · Current
Traditional Bank Financing
Peoples Bank
🏦 Working relationship, known credit profile
Maximize what traditional banking can provide. Peoples is the known partner — use this runway fully. Could resolve short-term or extend another year. The ceiling here is the leverage ratio tolerance of a regulated lender.
Active Now Lower Cost of Capital Relationship-Driven Near Ceiling
I
↓ Cross $10M EBITDA Threshold ↓
II
Stage II · Near-Term
Private Credit — First Draw
Vendor / Marshberry Facilitated
📈 Unlocked at ~$10M EBITDA mark
Once you cross the $10M EBITDA threshold, Marshberry (or a comparable advisor) opens the private credit market. Higher leverage multiples than bank debt, covenant-lite structures, and longer hold periods. Push this as far as ratios allow — this is the engine of scale.
Milestone Triggered 4–6× Leverage Covenant-Lite Ratio Watch
↓ Leverage Ratios Tighten ↓
Stage III · Strategic Equity
Friendly Equity Injection
Nathan (or equivalent insider/partner)
🤝 Ratio relief without dilution of control
When private credit pushes ratios to the wall, bring in a trusted equity partner. A Nathan-type arrangement — friendly, aligned, not a formal PE dynamic. The equity bolsters the balance sheet, brings leverage ratios back into range, and preserves the path forward without ceding operational control.
Ratio Reset Control Preserved Relationship Capital Selective Dilution
III
↓ Ratios Restored · Return to Debt Markets ↓
IV
Stage IV · Re-Lever
Private Credit — Second Draw
Private Credit Market (Re-Engagement)
🔄 Larger platform, stronger ratios, better terms
The equity injection from Stage III cleans up the balance sheet. Return to private credit from a stronger position — larger EBITDA base, better coverage ratios, more negotiating leverage. This draw takes you materially further than the first and opens doors to more formal capital options.
Stronger Profile Bigger Ticket Better Terms Ceiling Approaches Again
↓ Scale Achieved · Formal Capital Ready ↓
Stage V · End State
Formal Minority Private Equity
Institutional PE Partner
🏛 Platform de-risked, multiple expansion in range
By this stage, the platform has scale, a proven acquisition track record, and a balance sheet that speaks for itself. A minority PE partner — not a buyout, not a loss of control — brings institutional capital, operational resources, and a path to a real liquidity event. This is the trench. Everything above builds to this.
Institutional Credibility Minority Position Liquidity Path Multiple Expansion
V
Capital Type Guide
Bank / Traditional Debt
Private Credit
Friendly / Insider Equity
Formal Private Equity
Milestone / Threshold