While the lender/borrower relationship is always important, it takes on even greater significance with Small/Medium-size Enterprises ("SME"). SME's need a partner that understands their business and is able to bring this insight to its credit decisions. They tend to be more comfortable with local and regional players because those lenders have first-hand knowledge of the market conditions in which they operate. Savile is headquartered in New York City and has satellite offices in Lima, Peru and Bogota, Colombia.
Savile provides customized financing solutions for its clients, who are often smaller companies with limited operating history and modest revenue levels. Although many of these small enterprises have viable business models, obtaining bank financing for working capital may be difficult. Savile is able to make financing available by incorporating availability of liquid collateral into the credit decision.
Principals have extensive relationships with Investment Banks, Business Brokers and Professional Firms which Savile leverages in its origination effort. Savile's approach to transaction origination focuses on the quality of opportunities the Firm can review - creating a pipeline of transactions of indeterminate or questionable quality is of little use to a lender. On the other hand, ability to be selective at every stage of the origination process - from initial introduction to final approval - creates a real advantage in risk control.
Savile's origination relationships are primarily organizations we have known in excess of ten years. This network allows Savile to expand its geographic reach well beyond internal resources, generating hundreds of qualified transaction opportunities annually.
Structure / Collateral: Generally Savile structures loans secured with collateral. For Savile's purposes, collateral is an asset(s) that can be converted into cash within a year.
Cash Control: This is an important part of risk control. Savile makes use of controlled accounts ("lockboxes") to manage the risk of the cash collateral. Bankruptcy remote SPV’s and/or trusts are used as needed.
Perfected Security Interest: Savile structures transactions to protect its interests by a variety of legal structures suited to the specifics of the transaction and governing jurisdiction. Security interest are generally secured either by purchase, pledge of collateral and/or by making appropriate collateral filings. In choosing security instruments and methodologies, Savile has the benefit of many years of institutional experience.
Savile has developed a proprietary credit model that generates a rating for each facility. The model is based on credit models used by banks and rating agencies, but is specifically adapted for application to small business lending. The focus of the credit process is capital preservation. To that end Savile seeks to negotiate tight financial covenants and strong governance controls of the borrower; numerous exit strategies out of an investment (cash flow, maturity, asset sales, warrant puts, equity puts) are evaluated in making each credit decision.