TechPrecision has replaced its prior bank financing with a new secured credit package from Rosenthal & Rosenthal. The facility combines a borrowing-base revolver with two funded term loans, and the proceeds were used to repay the company’s existing loan obligations and cover financing costs.
The new arrangement provides working-capital capacity but also places substantially all of the borrowers’ personal property—and Ranor’s Massachusetts facility—behind the lender’s claims. TechPrecision, Ranor and Stadco are jointly and severally responsible for the obligations.
Key details
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The package includes three facilities: a revolving line of credit of up to $5 million, a $1.5 million term loan with a three-year repayment schedule, and a $3.5 million term loan with a five-year repayment schedule. Both term loans were funded at closing on Nov. 3, 2026.
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The $5 million revolver is subject to a borrowing base, not automatically available in full. Its availability is based mainly on eligible accounts receivable, plus eligible work-in-progress contracts. The work-in-progress portion is capped at $1.5 million, and advances are also subject to the lender’s discretion. New advances are unavailable while a default is continuing.
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Proceeds refinanced the previous loan. TechPrecision used the new financing to repay all outstanding obligations under its prior loan agreement, including notes held by Beacon Bank & Trust, and to pay fees and expenses. Additional advances may be used for operating needs, working capital and other corporate purposes.
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The term loans require monthly principal payments beginning Dec. 1, 2026. The three-year loan calls for payments of $41,666.66 a month, with the remaining balance due by Nov. 1, 2029. The five-year loan calls for monthly payments of $58,333.33, with the remaining balance due by Nov. 1, 2031. Each loan also carries interest.
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Interest rates are tied to the prime rate. The term loans carry a rate 2 percentage points above prime, rising to 5 percentage points above prime after maturity. Revolver rates range from 0.75 to 4.25 percentage points above prime, depending on borrowing levels and the borrowing base. A 4% prime-rate floor applies to borrowings under the facility. During a continuing default, the rate rises to prime plus 7.25 percentage points.
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The agreement initially runs through Nov. 30, 2029, then renews annually unless terminated. TechPrecision may end it on that date or a later anniversary with at least 60 days’ notice. Other early termination by the borrowers requires lender consent and may involve additional payments. Early-termination fees are based on the $5 million revolver limit: $100,000 before the first anniversary, $50,000 from the first to the second anniversary, and $25,000 thereafter. Termination makes all outstanding facility obligations, including both term loans, due.
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The financing is secured by broad collateral. The lender has a security interest in substantially all personal property of the borrowers, including receivables, inventory, equipment, intellectual property and work-in-progress contracts. Ranor also granted a first mortgage on its Westminster, Massachusetts, facility, securing a maximum principal amount of $8.5 million.
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The borrowers paid about $600,000 in closing costs, including legal, accounting, facility and broker fees. TechPrecision also issued 25,000 common shares to the broker that introduced it to the lender.
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The agreement imposes financial and payment restrictions. The borrowers must provide audited annual financial statements and maintain at least $5.5 million in tangible net worth at each quarter-end. Dividends and other distributions on TechPrecision equity are restricted above $250,000 in a fiscal year, and are prohibited while a default exists. The agreement also limits certain debt, liens, investments and other payments.
Plain-English implications
The refinancing changes TechPrecision’s lender and borrowing structure while providing up to $5 million of revolving capacity, subject to eligible collateral and lender approval. In exchange, the company and its subsidiaries have pledged extensive assets, accepted ongoing financial covenants and agreed that a default or termination can make the full outstanding balance due.