Monroe forms JV with small business lender

The Chicago-based firm is initially providing a $50 million senior secured loan to Channel Partners and plans to scale that investment over time.  

Monroe Capital has entered into a joint venture with Channel Partners, a provider of small business working capital loans. In addition, Chicago-based Monroe acted as sole lead arranger and administrative agent for a $50 million senior credit facility to support the growth of Channel Partners, Monroe said in a statement this week. Monroe plans to scale its investment in the business over time, chief executive Ted Koenig told PDI, though he couldn’t say to what level yet.

Based in Maple Grove, Minnesota, Channel Partners issues loans through partnerships with equipment leasing and finance companies. Since its founding in 2009, the firm has originated 3,000 loans, generating loan receivables of $150 million through these partnerships.

“Monroe Capital is a highly knowledgeable financial partner with substantial capital resources and deep relationships in the banking and asset management industries,” Brad Peterson, chief executive of Channel Partners, said in a statement. “We are very pleased to partner with them as we look to drive our focused loan origination strategy and grow our on-balance sheet funding activity.”

“The unique origination channel and the underserved market need attracted us to the transaction,” commented Koenig. “The Channel Partners investment represents Monroe’s growing focus on the specialty finance business sector.”

The capital for the investment was drawn from across Monroe’s platform, including its private funds and BDC, Koenig said, adding that the firm has two more deals coming through the pipeline this week.

Monroe is a provider of senior and junior debt and equity co-investments to mid-market companies in the US and Canada. Investment types include unitranche financings, cash flow and enterprise value based loans, acquisition facilities, mezzanine debt, second lien or last-out loans and equity co-investments.