Recovery Capital Wright Rx for Disasters

November 22, 2017

ATLANTA—When natural disasters strike, as they have in abundance lately across the United States, the two most likely words being mouthed by those impacted are: “Now what?”

It’s a refrain being heard all too often from hoteliers in the wake of recent events, from the wildfire inferno in California to the hurricane-generated floods in Texas and Florida to the Midwest’s tornadoes and the storm devastation that has the island territory of Puerto Rico still reeling.

So when it came time to strategize against the events and various scenarios cropping up over the past few months, Jon S. Wright, chairman/CEO of Access Point Financial Inc., opted for a path that could produce the most good in the shortest time: providing recovery capital within 24 hours.

“We look at how we can benefit our clients more than simply being a commodity. I’ve always said, in our business, lending money isn’t so difficult; people know the cost of money. It is a commodity, so it’s not as gray an area as with other suppliers into the industry or in the industry, for that matter,” said Wright.

A veteran of any number of income-crushing, revenue-debilitating crises, from the savings and loan debacle in the late-1980s/1990s that gave rise to the Resolution Trust Corp. to the more-recent Great Recession, Wright has espoused the benefits of “buy now, pay later” programs. Recalling those times, he suggested such an approach—like offering 12 months of no payments to franchisees caught up in the S&L crisis—“really helped people envision where the end of the tunnel was, and allowed them to make a purchasing decision with some level of comfort that 12 months was far enough out that they could acquire goods and services during a slowdown. It was very, very productive for all that were involved.”

The CEO noted he and his team were talking about the company’s philanthropic efforts, such as with the American Red Cross, the American Cancer Society and others, when the question was raised how to help clients during tough times. He sees the current Access Point Financial recovery capital program as almost a rewind back to those S&L times in terms of helping hoteliers. “I’ve kind of surprised myself that we didn’t think of it sooner, but it’s taken on a pretty good bit of popularity,” said Wright.

The executive stressed that the company is committed to helping hoteliers rebuild after damage from recent disasters, particularly hurricanes. With the tagline “Let’s rebuild together,” the recovery capital program offers six months of no payments and 12 months of interest-only payments.

“In the past, and still today, we will provide seasonal-type of payment plans for clients who are in seasonal areas—beaches, ski slopes, whatever the case may be—that they need to build into their debt obligations. We help them with that. So this is really not different,” he said.

“We are delaying the payments altogether,” he continued. “I think it gives a sense of comfort with all that people are worried about in their personal life, which includes their hotel investment as well, and just the day-to-day of things being destroyed or flooded from hurricanes, tornadoes. So we just think in terms of how best to accommodate them to make their lives a little simpler than what it would be otherwise… It gives them the ability to go ahead and order or pay for goods and services that the hotel certainly needs to renovate and re-establish their presence in the market. They also have their insurance claims coming. We’re just a bridge.”

Wright said the company has fielded requests from the Houston area, which was slammed by Hurricane Harvey in late August, as well as several beach locations. Thus far, no offshore requests have come to Access Point Financial; however, the CEO noted, “We will, and have, provided that offshore type of financing in the past.”

Creditworthiness is among the criteria the company, which issues some 250 loans a year, is taking into consideration for those seeking financing via the recovery capital program, although Wright said there’s flexibility.

“We can manage around issues that a client can explain to us in simple terms; we’re flexible in that regard,” he said.

In terms of collateral—or the lack thereof given destroyed properties—Access Point Financial is typically securing the FF&E being replaced.

“And then the insurance company and/or senior lender would take control of that lien once we were paid off,” said the CEO. “It really looks like a bridge program. I don’t think it’s that prevalent out there because a lender is not going to make as much money off of it if you’re only into the loan for six to 12 months. Lenders want to be typically more than three, four years into a loan term before they can make enough capital from that loan to make it worth their while to originate it.”

As for the size of the loans, Wright said he’s seeing a range anywhere between $50,000 to $15 million. “Our loans in ‘normal days’ are typically $250,000 to $25 million, and that’s new-construction included in that $25 million,” he added.

Interest rates mirror those on typical transactions and are in the 7-9% range, trailing down if Access Point Financial has the senior debt on the entire asset versus a secondary sliver in the capital stack, which is typically the case.

Right now, there’s no particular pattern of segment type seeking the financing, although Wright observed there haven’t been many requests from full-service resorts. “Primarily, the dollars we deploy are found to be most viable in select-service assets, tertiary markets. But again, we’ll see some urban requests that come in from the inner city and from the MSAs that we sometimes don’t see because of the nature of the principal behavior of those types of assets. The banks want to make those loans, and typically, you have a senior loan in place already, so they would be the likely candidates to make any type of a bridge loan until some insurance proceeds were consummated,” he said.

Overall, said Wright, the recovery capital program is in line with company policy. “And our policy is basically if the loan makes sense—common sense included—go ahead and make it. We would certainly entertain this type of a loan for anyone calling up and explaining a situation they wanted us to help manage,” he said.

The executive expects the program to close on $50 million to $75 million by year’s end. HB

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ATLANTA TREND Executive Profile: Jon S. Wright

November 2, 2017

On October 5th, Atlanta based hotel lender Access Point Financial, Inc. (APF) announced the recapitalization of the company in a transaction led by WPC Investments (WCPI). The recap saw the successful exit of Stone Point Capital from the business in a $350 million transaction. The new investor has also committed to facilitate further expansion of the company.

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Access Point Financial, Inc. Closes Recapitalization by WCP Investments LP Investors

October 5, 2017

ATLANTA, Oct. 5, 2017 Access Point Financial (APF), today announced the recapitalization of the company in a transaction led by WCP Investments LP (“WCPI”), having been arranged by Wells Fargo and KBW as buy-side and sell-side advisors, respectively.  The recapitalization saw the successful exit of Stone Point Capital from the business and represented a $350 million+ transaction, including commitments from WCPI and APF Management to facilitate the continued expansion of the platform.

Commenting on the transaction, Jon S. Wright, APF’s chairman and CEO, said, “We are delighted with the success we have achieved since our initial capitalization in 2011 and will now move to grow the platform to even greater heights with WCPI as our financial partner. The APF management team will be forever grateful to Chuck Davis and his investment team at Stone Point for their forward-looking and pioneering rational when earmarking the initial 2011 investment. Our new partners at WCPI share our passion for integrity as well as verifiable results driven by operating partners with a 25 year track record of risk adjusted returns.”

WCPI’s Chief Investment Officer, Michael Gontar, commented, “We are excited to gain exposure to this unique asset class and are looking forward to continuing the tremendous growth that APF has achieved since its founding.”  Chuck Davis, CEO of Stone Point Capital, remarked, “Jon and his team did a tremendous job forming and building the Access Point business.  We have really enjoyed our partnership with the Access Point team, and we wish them great success in the future.”

APF, a direct lender that primarily focuses on the hospitality industry, offers a full-service lending and advisory platform that provides financing to qualified hotel franchisees of all major brands and independent boutique hotels throughout the United State and Canada.  The company has made approximately 650 loans representing approximately $3.5 billion of asset value from its inception in 2011, with banking partners such as JP Morgan, Credit Suisse and Key Bank.  APF was recognized by Inc. 500 as the #17 ranked private growth company in the United States in 2015, and was also a top 20 growth company as ranked by the Atlanta Business Chronicle in 2015. The Inc. 500 ranking placed APF as the top ranked debt provider (in terms of growth).

Wright added, “We have a loyal and very talented management team and client base that have served in unison for almost 20 years.  Our clients and hotel franchise brand executives have helped define us as the premiere lender in this specialty asset class.  We provide one stop shopping in the middle market hotel lending space.”

About Access Point Financial

Based in Atlanta, Access Point Financial (APF) is a direct full-service lender servicing the hospitality industry. APF was formed by a private equity firm based in Greenwich, Conn. and the APF Management team. APF lends to qualified franchisees of major hotel brands and independent boutique hotels throughout the United States and Canada and is not an owner operator of hotel assets. For more information, visit www.accesspointfinancial.com.

About WCPI

WCPI is a joint venture between Wafra Capital Partners Inc. (“WCP”) and NBK Capital (“NBKC”). WCP, a New York based SEC-registered investment adviser, manages products particularly on a Shari’ah-compliant basis specialized in asset-based finance and real estate investments.  WCP manages approximately $4.0 billion in commitments and assets under management as of  March 31, 2017.* NBKC is an investment firm that operates from Kuwait, Dubai, Istanbul, and Cairo and is focused on four primary lines of business, including Asset Management, Alternative Investments, Brokerage, and Investment Banking.  NBKC manages approximately $6.4 bilion in commitments and assets under management as of December 31, 2016.  For more information, visit www.wafracapital.com.

* WCP and its affiliates’ estimated assets and commitments under management generally valued as of March 31,2017. Valuations of assets are estimated. All assets are not necessarily valued as of the same date and current values may differ. Assets under management calculation methodologies may differ from year to year.

MidCap Financial Closes Credit Facility with Access Point Financial, Inc.

June 21, 2017

BETHESDA, MD, June 20, 2017 – MidCap Financial (“MidCap”), a leading commercial finance company focused on middle market transactions, today announced it recently closed an asset backed credit facility with Access Point Financial, Inc. (“APF”) a specialty hotel finance company. This credit facility expands Access Point’s capacity to extend credit to hotel operators across the United States.

“Access Point Financial is very pleased to enter into this new lending relationship with MidCap Financial as we continue to grow and diversify our platform’s funding sources. The recently closed credit facility will further support the growth of our capex and mortgage loan portfolios, providing Access Point with added overall financing flexibility for our various product offerings. The MidCap team was instrumental in providing Access Point with a highly customized financing solution to meet the needs of our platform and we look forward to a long-term relationship with MidCap,” said Jon Hellbusch, Managing Director of Access Point Financial.

Founded in 2011 by CEO Jon S.Wright, the Executive Management team and Stone Point Capital, LLC, a private equity firm based in Connecticut, Access Point Financial is a direct full-service lender focused on the hospitality industry.

“We are excited to begin this new relationship with Access Point Financial.  APF has built an excellent business, with a unique approach to providing credit to businesses in the hospitality industry.  We look forward to supporting Jon Wright and his company’s senior management team in its plans for the successful growth of their business,” said Michael Cheng, Managing Director of MidCap Financial Services, LLC.

About Access Point

Access Point Financial is a specialty hotel finance company. Offering a full-service hospitality lending and advisory platform, APF provides financing to qualified franchisees of major hotel brands and independent boutique hotels throughout the United States and Canada. APF provides tailored loan and capital lease programs to meet the specific needs of each client.

About MidCap Financial

MidCap Financial is a middle market-focused, balance sheet lender that provides debt solutions to companies across all industries.The company’s subsidiary, MidCap Financial Services, LLC is headquartered in Bethesda, MD, with regional offices in Atlanta, Charlotte, Chicago, Los Angeles, New York and San Francisco.  The company focuses on the debt needs of the middle market in five areas:

  • General Asset-Based: working capital loans collateralized by third-party accounts receivable, inventory, and other assets;
  • Leveraged Finance: cash flow based loans to Financial Sponsor backed companies;
  • Life Sciences: financing for venture backed and micro/small cap pharmaceutical, biotech, and medical device companies;
  • Lender Finance: loans provided across the consumer and commercial finance sectors; and
  • Real Estate: loans for the acquisition, refinance and recapitalization of healthcare and commercial real estate properties.

MidCap Financial refers to MidCap FinCo Designated Activity Company, a private limited company domiciled in Ireland, and its subsidiaries.  MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, pursuant to an investment management agreement between Apollo Capital Management, L.P. and MidCap FinCo Designated Activity Company.  References to MidCap Financial prior to January 2015 are to its predecessor, MidCap Financial, LLC.

Additional information about MidCap Financial can be found at www.midcapfinancial.com

Contact: MidCap Financial Services, LLC

Michael Cheng, Managing Director – Lender Finance
904-394-2881
mcheng@midcapfinancial.com

 

Contact: Access Point Financial, Inc.
Jon Hellbusch, Managing Director
612-638-2970
jhellbusch@accesspointfinancial.com

Media Contact

Sheryl Gudelsky
678.781.7229

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MidCap Financial Closes Credit Facility with Access Point Financial, Inc.

June 21, 2017

BETHESDA, MD, June 20, 2017 – MidCap Financial (“MidCap”), a leading commercial finance company focused on middle market transactions, today announced it recently closed an asset backed credit facility with Access Point Financial, Inc. (“APF”) a specialty hotel finance company. This credit facility expands Access Point’s capacity to extend credit to hotel operators across the United States.

“Access Point Financial is very pleased to enter into this new lending relationship with MidCap Financial as we continue to grow and diversify our platform’s funding sources. The recently closed credit facility will further support the growth of our capex and mortgage loan portfolios, providing Access Point with added overall financing flexibility for our various product offerings. The MidCap team was instrumental in providing Access Point with a highly customized financing solution to meet the needs of our platform and we look forward to a long-term relationship with MidCap,” said Jon Hellbusch, Managing Director of Access Point Financial.

Founded in 2011 by CEO Jon S.Wright, the Executive Management team and Stone Point Capital, LLC, a private equity firm based in Connecticut, Access Point Financial is a direct full-service lender focused on the hospitality industry.

“We are excited to begin this new relationship with Access Point Financial.  APF has built an excellent business, with a unique approach to providing credit to businesses in the hospitality industry.  We look forward to supporting Jon Wright and his company’s senior management team in its plans for the successful growth of their business,” said Michael Cheng, Managing Director of MidCap Financial Services, LLC.

About Access Point

Access Point Financial is a specialty hotel finance company. Offering a full-service hospitality lending and advisory platform, APF provides financing to qualified franchisees of major hotel brands and independent boutique hotels throughout the United States and Canada. APF provides tailored loan and capital lease programs to meet the specific needs of each client.

About MidCap Financial

MidCap Financial is a middle market-focused, balance sheet lender that provides debt solutions to companies across all industries.The company’s subsidiary, MidCap Financial Services, LLC is headquartered in Bethesda, MD, with regional offices in Atlanta, Charlotte, Chicago, Los Angeles, New York and San Francisco.  The company focuses on the debt needs of the middle market in five areas:

  • General Asset-Based: working capital loans collateralized by third-party accounts receivable, inventory, and other assets;
  • Leveraged Finance: cash flow based loans to Financial Sponsor backed companies;
  • Life Sciences: financing for venture backed and micro/small cap pharmaceutical, biotech, and medical device companies;
  • Lender Finance: loans provided across the consumer and commercial finance sectors; and
  • Real Estate: loans for the acquisition, refinance and recapitalization of healthcare and commercial real estate properties.

MidCap Financial refers to MidCap FinCo Designated Activity Company, a private limited company domiciled in Ireland, and its subsidiaries.  MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, pursuant to an investment management agreement between Apollo Capital Management, L.P. and MidCap FinCo Designated Activity Company.  References to MidCap Financial prior to January 2015 are to its predecessor, MidCap Financial, LLC.

Additional information about MidCap Financial can be found at www.midcapfinancial.com

Contact: MidCap Financial Services, LLC

Michael Cheng, Managing Director – Lender Finance
904-394-2881
mcheng@midcapfinancial.com

 

Contact: Access Point Financial, Inc.
Jon Hellbusch, Managing Director
612-638-2970
jhellbusch@accesspointfinancial.com