Executive summary
Generated from the model — review and edit before submission.
Cimarron Valley Grain & Feed, Inc. is a 34-year grain elevator & feed milling based in Perkins, OK. The proposed $2,400,000 USDA B&I facility funds a expansion at a 10.5% note rate, amortizing over 15 years. On trailing revenue of $12,300,000 and adjusted EBITDA of $1,357,000 (11.0% margin), the base-case projection produces a Year-1 debt-service coverage ratio of 1.40×, with a five-year minimum of 1.40× and an average of 1.51×. Cash flow supports the requested facility against the 1.15× program floor and 1.25× lender target.
Recommend submission. Coverage clears the 1.25× lender target in every projected year, and the business absorbs a 8.2% decline in Year-1 revenue before reaching the 1.15× floor. Under a full lender stress case, coverage holds at 1.12×.
Strengths
- 3 years of consistent top-line growth (3.9% CAGR), from $11,400,000 to $12,300,000.
- Gross margin held at 26.0% with adjusted EBITDA of $1,357,000 — 1.69× leverage against the requested facility.
- Healthy liquidity: current ratio 2.68× and working capital of $2,758,000.
- Conservative balance sheet: debt-to-equity of 0.70× prior to the proposed facility.
- Coverage strengthens every year, from 1.40× in Year 1 to 1.60× by Year 5.
Risks & mitigants
- Pronounced seasonality: modeled monthly coverage dips to 0.70× in the off-season even though annual coverage is sound.→ Projected liquidity never goes negative (low point $443,562); a seasonal working-capital line is recommended to bridge troughs.
- Add-backs of $229,000 (16.9% of adjusted EBITDA) require documentation to be credited by the lender.→ Owner compensation is normalized to a $95,000 market salary; the stress case haircuts discretionary add-backs by 35% and coverage still holds at 1.12×.
- Projected coverage assumes 4.0% Year-1 revenue growth and a stable cost structure.→ Sensitivity shows 8.2% of downside tolerance before the 1.15× floor; the full stress case (growth haircut, cost escalation, owner tax provision) yields 1.12×.
Key terms
- Facility
- $2,400,000
- Program
- USDA B&I
- Note rate
- 10.5%
- Amortization
- 15 years
- Monthly P&I
- $26,529.57
- Annual debt service
- $318,355
- Trailing revenue
- $12,300,000
- Adjusted EBITDA
- $1,357,000
- Leverage
- 1.69× adj. EBITDA