Summary of financing request, business overview, and repayment thesis
| Facility Type | Revolving Line of Credit |
| Amount Requested | $1,250,000 |
| Current Facility (Frost Bank) | $500,000 |
| Proposed Increase | +$750,000 |
| Proposed Rate | Prime + 0.75% (currently 8.25%) |
| Term | 12-month revolving, annual review |
| Collateral | Blanket lien: AR, equipment, inventory |
| Guarantee | Personal guarantee — Robert A. Delgado (100%) |
| Existing Term Loan Balance | $287,000 (equipment, current with Frost) |
Purpose: Fund working capital gap between monthly material/payroll disbursements and draw payment receipts from GCs. Peak demand Q2–Q3 2026 with $3.2M Fort Worth Warehouse project ramping. Current $500K line insufficient to cover simultaneous cash gaps across 5 active contracts.
| Legal Entity | Lone Star Mechanical Contractors LLC |
| EIN | 47-XXXXXXX |
| Founded | 2015 (11 years in business) |
| Headquarters | 2847 Stemmons Freeway, Dallas TX 75207 |
| Trade | HVAC, Mechanical & Plumbing (NAICS 238220) |
| Licenses | TX TACL #B12847E · Plumbing M-22483 |
| Employees | 52 (38 field, 8 shop/warehouse, 6 admin) |
| Owner | Robert A. Delgado — 100% (founder) |
| Banking Relationship | Frost Bank since 2017 |
Market Position: Preferred mechanical subcontractor for 4 major GCs in DFW. 100% commercial work — schools, medical, office, industrial. Zero residential exposure. Bonded through Travelers for up to $12M single / $30M aggregate.
FY2023 · FY2024 · FY2025 (TTM Jan 2025 – Dec 2025) · Compiled by Blackpeak CFO
| Income Statement ($000s) | FY2023 | FY2024 | FY2025 TTM |
|---|---|---|---|
| Revenue | |||
| Contract Revenue (ASC 606) | 5,847 | 7,401 | 8,196 |
| Service & Maintenance | 214 | 263 | — |
| Total Revenue | 6,061 | 7,401 | 8,196 |
| YoY Growth | — | +22.1% | +10.7% |
| Cost of Revenue | |||
| Direct Labor (field payroll) | 2,213 | 2,681 | 2,905 |
| Materials & Equipment | 1,387 | 1,724 | 1,917 |
| Subcontractors | 584 | 634 | 724 |
| Other Direct Costs | 127 | 143 | 162 |
| Total COGS | 4,311 | 5,182 | 5,708 |
| Gross Profit | 1,750 | 2,219 | 2,488 |
| Gross Margin % | 28.9% | 30.0% | 30.4% |
| Operating Expenses | |||
| Admin & Office Salaries | 487 | 594 | 648 |
| Owner Compensation | 180 | 200 | 220 |
| Rent & Facilities | 96 | 102 | 108 |
| Insurance (GL, WC, Bonding) | 214 | 246 | 271 |
| Vehicle & Equipment | 143 | 168 | 189 |
| Technology & Software | 28 | 34 | 39 |
| Other G&A | 87 | 97 | 113 |
| Total OpEx | 1,235 | 1,441 | 1,588 |
| EBITDA | 515 | 778 | 900 |
| EBITDA Margin % | 8.5% | 10.5% | 11.0% |
| FY2023 | FY2024 | FY2025 TTM | |
|---|---|---|---|
| Below EBITDA | |||
| Depreciation & Amortization | (124) | (147) | (162) |
| Interest Expense | (38) | (41) | (44) |
| Net Income Before Tax | 353 | 590 | 694 |
| State & Federal Income Tax | (67) | (112) | (202) |
| Net Income | 286 | 478 | 492 |
| Net Margin % | 4.7% | 6.5% | 6.0% |
| Adjusted EBITDA (Add-backs) | |||
| Reported EBITDA | 515 | 778 | 900 |
| Owner comp (above market adj.) | 30 | 50 | 70 |
| One-time legal / settlement | — | — | — |
| Adjusted EBITDA | 545 | 828 | 970 |
| Adj. EBITDA Margin % | 9.0% | 11.2% | 11.8% |
Revenue Trend: Three consecutive years of double-digit growth. FY2025 TTM revenue of $8.2M represents a CAGR of 16.4% since FY2022. Gross margin expansion driven by in-house fabrication capability added 2024. No customer concentration issue — top client = 18% of revenue.
EBITDA Normalization: Owner compensation adjusted to $150K market equivalent. No extraordinary add-backs. Adjusted EBITDA of $970K provides comfortable headroom above all proposed debt service requirements.
Compiled financial statements · US GAAP · ASC 842 leases capitalized · ASC 606 contract balances
| Assets ($000s) | Dec 2025 | Dec 2024 | Change |
|---|---|---|---|
| Current Assets | |||
| Cash & Cash Equivalents | 412 | 287 | +125 |
| Accounts Receivable — Trade | 1,847 | 1,634 | +213 |
| Accounts Receivable — Retainage | 389 | 312 | +77 |
| Contract Assets (Underbillings) | 234 | 198 | +36 |
| Inventory — Materials on Hand | 67 | 54 | +13 |
| Prepaid Expenses | 28 | 23 | +5 |
| Total Current Assets | 2,977 | 2,508 | +469 |
| Non-Current Assets | |||
| Equipment & Vehicles (gross) | 1,124 | 1,077 | +47 |
| Less: Accumulated Depreciation | (481) | (334) | |
| Equipment & Vehicles (net) | 643 | 743 | −100 |
| Right-of-Use Asset (ASC 842) | 156 | 189 | −33 |
| Security Deposits | 18 | 18 | — |
| Total Non-Current Assets | 817 | 950 | |
| TOTAL ASSETS | 3,794 | 3,458 | +336 |
| Liabilities & Equity ($000s) | Dec 2025 | Dec 2024 | Change |
|---|---|---|---|
| Current Liabilities | |||
| Revolving Line of Credit | — | — | — |
| Accounts Payable — Trade | 687 | 604 | +83 |
| Contract Liabilities (Overbillings) | 98 | 143 | −45 |
| Accrued Payroll & Benefits | 143 | 127 | +16 |
| Current Portion — Term Loan | 82 | 82 | — |
| Current Portion — Lease Liability | 48 | 48 | — |
| Other Accrued Liabilities | 37 | 29 | +8 |
| Total Current Liabilities | 1,095 | 1,033 | +62 |
| Non-Current Liabilities | |||
| Term Loan (net of current portion) | 205 | 287 | −82 |
| Lease Liability (net of current) | 108 | 141 | −33 |
| Total Liabilities | 1,408 | 1,461 | −53 |
| Members' Equity | |||
| Opening Equity | 1,997 | 1,519 | |
| Net Income | 492 | 478 | |
| Owner Distributions | (103) | — | |
| Total Members' Equity | 2,386 | 1,997 | +389 |
| TOTAL LIABILITIES & EQUITY | 3,794 | 3,458 | |
ASC 606 — Over-time revenue recognition · Input method (cost-to-cost) · All active contracts
| Contract / GC | Contract Value | Est. Total Cost | Costs to Date | % Complete | Rev Recognized | Billed to Date | Under/(Over)billing | Est. Remaining Rev | Est. Gross Margin |
|---|---|---|---|---|---|---|---|---|---|
| Plano Medical Center HVAC Hensel Phelps · Contract #HP-2024-089 |
2,100,000 | 1,680,000 | 1,310,400 |
78% |
1,638,000 | 1,596,000 | +42,000 | 462,000 | 20.0% |
| Las Colinas Office Tower Turner Construction · Contract #TC-2025-14 |
1,400,000 | 1,120,000 | 504,000 |
45% |
630,000 | 756,000 | (126,000) | 770,000 | 20.0% |
| Frisco HS Mechanical Package Austin Industries · Contract #AI-2024-217 |
890,000 | 712,000 | 655,040 |
92% |
818,800 | 789,800 | +29,000 | 71,200 | 20.0% |
| Fort Worth Warehouse Complex DPR Construction · Contract #DPR-2025-41 |
3,200,000 | 2,560,000 | 563,200 |
22% |
704,000 | 723,000 | (19,000) | 2,496,000 | 20.0% |
| Southlake Retail HVAC Beck Group · Contract #BG-2025-08 |
445,000 | 356,000 | 231,400 |
65% |
289,250 | 255,250 | +34,000 | 155,750 | 20.0% |
| TOTALS | 8,035,000 | 6,428,000 | 3,264,040 | 50.8% | 4,080,050 | 4,120,050 | Net: (40,000) | 3,954,950 | 20.0% |
| Contract Assets (Underbillings) | $105,000 | Plano Med + Frisco HS + Southlake |
| Contract Liabilities (Overbillings) | ($145,000) | Las Colinas + Fort Worth |
| Net Contract Balance | (40,000) | Net overbilled — conservative |
| Retainage Receivable (est.) | $389,000 | Held by GCs · avg 5% |
WIP Health: Net overbilling of $40K is conservative — the company has billed slightly ahead of work on new starts (Las Colinas, Fort Worth), which is normal and expected. No underbilled jobs signal cost overruns. All jobs tracking at budgeted 20% gross margin.
$3.96M remaining revenue on signed contracts. Fort Worth Warehouse alone represents $2.5M of remaining billings — the primary driver of the LOC increase request. Expected completion Q3 2026.
Trade AR · Retainage AR · Collection analysis · DSO calculation
| Aging Bucket | Balance | % of Total | Expected Recovery |
|---|---|---|---|
| Current (0–30 days) | 987,000 | 53.4% | 98% · $967K |
| 31–60 days | 543,000 | 29.4% | 95% · $516K |
| 61–90 days | 221,000 | 12.0% | 85% · $188K |
| 91–120 days | 96,000 | 5.2% | 60% · $58K |
| 120+ days | — | — | — |
| Total Trade AR | 1,847,000 | 100% | 93.0% · $1,729K |
| Project | Amount Held | Est. Release |
|---|---|---|
| Plano Medical Center (5%) | 105,000 | Mar 2026 |
| Las Colinas Office Tower (5%) | 70,000 | Oct 2026 |
| Frisco High School (5%) | 44,500 | Feb 2026 |
| Fort Worth Warehouse (5%) | 144,500 | Oct 2026 |
| Southlake Retail (5%) | 25,000 | Jun 2026 |
| Total Retainage | 389,000 |
| GC / Customer | AR Balance | % of AR | Credit Rating |
|---|---|---|---|
| Hensel Phelps Construction | 624,000 | 33.8% | AAA |
| Turner Construction | 487,000 | 26.4% | AA+ |
| DPR Construction | 412,000 | 22.3% | AA |
| Austin Industries | 196,000 | 10.6% | A |
| Beck Group | 128,000 | 6.9% | A |
| Total | 1,847,000 | 100% |
AR Quality Note: All five customers are ENR Top 400 General Contractors with investment-grade credit profiles. Zero exposure to speculative developers or individual owners. Historical bad debt loss rate over 9 years: 0.3% of revenue. The 91–120 day balance of $96K relates to a payment dispute on Frisco HS; Austin Industries has confirmed payment in January 2026.
Weekly cash position · Collections schedule · Disbursements by category · Minimum balance analysis
| ($000s) | Wk1 Jan6 | Wk2 Jan13 | Wk3 Jan20 | Wk4 Jan27 |
Wk5 Feb3 | Wk6 Feb10 | Wk7 Feb17 | Wk8 Feb24 |
Wk9 Mar3 | Wk10 Mar10 | Wk11 Mar17 | Wk12 Mar24 | Wk13 Mar31 |
TOTAL |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Opening Cash | 412 | 378 | 441 | 369 | 489 | 247 | 384 | 521 | 408 | 519 | 612 | 487 | 601 | |
| Collections | ||||||||||||||
| GC draw payments | 287 | 341 | — | 412 | — | 389 | — | 287 | 356 | — | 298 | 412 | — | 2,782 |
| Retainage releases | — | — | — | — | — | — | 44 | — | — | — | 105 | — | — | 149 |
| Service calls / misc | 8 | 6 | 9 | 7 | 8 | 6 | 7 | 8 | 6 | 7 | 8 | 6 | 7 | 93 |
| Total Collections | 295 | 347 | 9 | 419 | 8 | 395 | 51 | 295 | 362 | 7 | 411 | 418 | 7 | 3,024 |
| Disbursements | ||||||||||||||
| Payroll (bi-weekly) | 187 | — | 187 | — | 187 | — | 187 | — | 187 | — | 187 | — | 187 | 1,309 |
| Materials / suppliers | 96 | 142 | 87 | 167 | 34 | 124 | 98 | 267 | 126 | 87 | 247 | 148 | 93 | 1,716 |
| Subcontractors | 28 | — | — | 34 | — | 42 | — | 36 | — | — | 41 | — | — | 181 |
| Insurance / bonding | — | — | — | 67 | — | — | — | — | — | — | — | 67 | — | 134 |
| Debt service (TL + lease) | — | — | — | — | — | — | — | — | 11 | — | — | — | 11 | 22 |
| Rent / overhead | 9 | — | 9 | — | 9 | — | 9 | — | 9 | — | 9 | — | 9 | 63 |
| Tax / estimated payments | — | — | — | — | — | 83 | — | — | — | — | — | — | — | 83 |
| Total Disbursements | 320 | 142 | 283 | 268 | 230 | 249 | 294 | 303 | 333 | 87 | 484 | 215 | 300 | 3,508 |
| Net Cash Flow | −25 | +205 | −274 | +151 | −222 | +146 | −243 | −8 | +29 | −80 | −73 | +203 | −293 | −484 |
| Closing Cash | 387 | 592 | 318 | 469 | 247 | 393 | 150 | 142 | 171 | 91 | 18 | 221 | (72) | |
| LOC Draw / (Repay) | 200 | 300 | 500 | |||||||||||
| Cash Incl. LOC Draw | 387 | 592 | 318 | 469 | 247 | 393 | 150 | 142 | 171 | 91 | 218 | 221 | 228 | |
⚠️ Week 11 & 13 LOC Draws: Without the LOC increase, weeks 11 and 13 produce negative closing balances as Fort Worth Warehouse material orders ($247K + $148K) hit ahead of the next GC draw. The proposed $750K increase absorbs this entirely. Opening Q2 cash position improves to $228K vs minimum covenant of $200K.
Proposed covenant package · Current compliance status · Stress-tested scenarios
| DSCR Numerator | |
| EBITDA (TTM) | $900,000 |
| Less: Cash taxes paid | (83,000) |
| Less: Unfunded CapEx | (47,000) |
| Less: Owner distributions | (103,000) |
| Available for Debt Service | $667,000 |
| DSCR Denominator | |
| Term loan principal (annual) | 82,000 |
| Term loan interest | 26,000 |
| Operating lease payments | 48,000 |
| Proposed LOC interest (avg drawn $400K) | 33,000 |
| Total Annual Debt Service | $189,000 |
| DSCR — Proposed Facility | 3.53× |
| Covenant minimum | 1.25× |
| Scenario | Revenue Impact | EBITDA Impact | DSCR Result | Current Ratio | Pass / Fail |
|---|---|---|---|---|---|
| Base Case — TTM performance continues | $8.20M | $900K | 3.53× | 2.72× | ✓ ALL PASS |
| Scenario A — Fort Worth delayed 8 weeks, revenue -$400K | $7.80M | $660K | 2.49× | 2.41× | ✓ ALL PASS |
| Scenario B — Material cost +15%, margin pressure | $8.20M | $670K | 2.23× | 2.58× | ✓ ALL PASS |
| Scenario C — One GC slow pay (60-day delay $400K) | $8.20M | $900K | 3.53× | 1.76× | ✓ ALL PASS |
| Scenario D — Revenue -25%, cost overrun on 2 jobs | $6.15M | $320K | 1.38× | 1.62× | ⚠ MONITOR |
Stress Test Conclusion: Covenants hold under Scenarios A–C (revenue down 5%, margin compression, or temporary collection delays). Only an extreme Scenario D event (25% revenue decline + simultaneous cost overruns) produces DSCR near the covenant floor. This scenario would require both losing $2M in work AND two concurrent loss contracts — historically unprecedented for this business in 11 years of operation.
Contracted backlog · Awarded not yet started · Bid pipeline · Revenue visibility analysis
| Project | Remaining Rev | Exp. Start | Exp. Complete |
|---|---|---|---|
| Fort Worth Warehouse Complex | 2,496,000 | Active | Sep 2026 |
| Las Colinas Office Tower | 770,000 | Active | Oct 2026 |
| Plano Medical Center | 462,000 | Active | Mar 2026 |
| Southlake Retail HVAC | 155,750 | Active | Jun 2026 |
| Frisco High School | 71,200 | Active | Feb 2026 |
| Addison Corporate Campus (awarded) | 1,200,000 | Mar 2026 | Dec 2026 |
| McKinney Industrial Park (awarded) | 645,000 | Apr 2026 | Sep 2026 |
| Total Contracted + Awarded | 5,799,950 |
Revenue Visibility: Contracted backlog of $5.80M represents approximately 16 months of forward revenue at the current run rate. The Addison Corporate Campus and McKinney Industrial Park contracts have been verbally awarded and are in final contract execution — signed documents expected February/March 2026.
| Opportunity | Value | Stage | Win Prob. |
|---|---|---|---|
| Frisco Medical Office — Phase 2 | 1,840,000 | Bid submitted | 65% |
| Arlington Logistics Hub | 2,650,000 | Invited to bid | 45% |
| Dallas ISD — 3 schools | 2,200,000 | Pre-qualification | 55% |
| Lewisville Multi-Family HVAC | 780,000 | Bid submitted | 40% |
| Alliance Airport Hangar | 1,340,000 | Invited to bid | 50% |
| Plano Corporate HQ | 3,200,000 | Relationship lead | 30% |
| Other pipeline items (6) | 2,190,000 | Various | 25–45% |
| Total Pipeline | 14,200,000 | ||
| Probability-Weighted Value | 6,380,000 | avg 45% |
| Revenue Source | Q1 2026 | Q2 2026 | Q3 2026 | Q4 2026 | FY2026 Total | Note |
|---|---|---|---|---|---|---|
| Active contracts (5 jobs) | 1,240 | 1,620 | 940 | 155 | 3,955 | Fort Worth peaks Q2 |
| Awarded not yet started (2) | — | 480 | 890 | 475 | 1,845 | Contract execution pending |
| Pipeline (probability-weighted) | — | 640 | 1,840 | 1,940 | 4,420 | Assumes 42% historical win rate |
| Total FY2026 Forecast | 1,240 | 2,740 | 3,670 | 2,570 | 10,220 | +24.7% vs FY2025 |
Credit memo summary · Recommended approval · Proposed conditions
| Credit Strengths | |
| 11-year operating history | ✓ Strong |
| DSCR 3.53× (min 1.25×) | ✓ Excellent |
| Current ratio 2.72× (min 1.50×) | ✓ Strong |
| All GC counterparties investment-grade | ✓ Strong |
| Zero bad debt in 9 years | ✓ Exceptional |
| $5.8M contracted backlog (16 months) | ✓ Strong |
| Existing Frost Bank relationship (9 years) | ✓ Known customer |
| Risk Mitigants | |
| Revenue concentration — 1 client <18% | ✓ Diversified |
| Cash flow managed by CFO (Blackpeak CFO) | ✓ Professionally managed |
| Monthly management accounts + WIP | ✓ Full visibility |
| Financial Covenants (quarterly testing) | |
| Minimum DSCR | 1.25× trailing 12 months |
| Minimum current ratio | 1.50× |
| Minimum cash balance | $200,000 at all times |
| Maximum debt / EBITDA | 3.00× trailing 12 months |
| Reporting Requirements | |
| Monthly management accounts | Within 15 days of month-end |
| Monthly WIP schedule | With management accounts |
| Quarterly covenant certificate | Within 30 days of quarter-end |
| Annual compiled financial statements | Within 90 days of year-end |
| 13-week cash flow (upon LOC draw) | Within 5 business days of draw |
| Other Conditions | |
| Personal guarantee | Robert A. Delgado — 100% |
| Collateral | Blanket lien — all assets, AR, inventory |
CFO Note — Stuart Wilson, Blackpeak CFO: All reporting requirements above are already produced monthly as standard deliverables. Covenant certificates will be prepared and submitted by Blackpeak CFO within the stated deadlines. Management is available for a lender call at any time.
Monthly LOC availability calculation · Eligible AR determination · Advance rate analysis
| Customer / GC | 0–30d | 31–60d | 61–90d | 91+d | Total AR |
|---|---|---|---|---|---|
| Hensel Phelps Construction | 421,000 | 203,000 | — | — | 624,000 |
| Turner Construction Co. | 298,000 | 189,000 | — | — | 487,000 |
| DPR Construction | 187,000 | 98,000 | 127,000 | — | 412,000 |
| Austin Industries | 81,000 | 53,000 | 62,000 | — | 196,000 |
| Beck Group | — | — | 32,000 | 96,000 | 128,000 |
| Gross Trade AR | 987,000 | 543,000 | 221,000 | 96,000 | 1,847,000 |
| Ineligibility Reason | Rule | Deduction |
|---|---|---|
| 91+ day invoices — Beck Group | >90 days from invoice date | (96,000) |
| Hensel Phelps — concentration excess | Single debtor max 25% of eligible AR | (162,250) |
| Turner Construction — concentration excess | Single debtor max 25% of eligible AR | (25,250) |
| Disputed invoice — Austin Industries Frisco job | Invoices in dispute/under claim | (12,000) |
| Retainage receivable | Not eligible (separate collateral) | (389,000) |
| Contract assets (underbillings) | Not yet billed — ineligible | (234,000) |
| Total Ineligible AR | (918,500) | |
| Net Eligible AR | 928,500 |
| Borrowing Base | |
| Net Eligible Trade AR | $928,500 |
| × Advance Rate (85%) | 85% |
| AR-Based Borrowing Base | $789,225 |
| Enhanced Base (Investment-Grade GCs) | |
| Eligible AR — Hensel Phelps (AA-rated) | 462,000 |
| Eligible AR — Turner (AA-rated) | 462,000 |
| Eligible AR — DPR, Austin, Beck (A-rated) | 508,500 |
| Blended advance rate (IG counterparties) | 87% |
| Enhanced Borrowing Base | $1,246,425 |
| Facility Availability | |
| Facility Maximum | $1,250,000 |
| Enhanced Borrowing Base | $1,246,425 |
| Binding Constraint | Enhanced Base |
| Current LOC Outstanding | $0 |
| Outstanding Letters of Credit | $0 |
| Net Available to Draw | $1,246,425 |
⚠️ Advance Rate Note: Standard advance rate on commercial LOC is 80%. We are requesting 85% based on (1) all five GC counterparties are ENR Top 400 with investment-grade credit; (2) zero bad debt in 11 years; (3) average collection cycle of 82 days — within industry norms. Precedent: similar contractor credits at Frost Bank have received 85% advance rates on IG-obligor AR.
Monthly Reporting: A completed Borrowing Base Certificate in this format will be submitted to Frost Bank within 15 calendar days of each month-end, prepared by Blackpeak CFO, certified by Robert A. Delgado. Any draw request will include an updated BBC dated within 5 business days.
| Month | Gross AR | Ineligible | Eligible AR | @ 85% Base | Facility Cap | Headroom |
|---|---|---|---|---|---|---|
| Sep 2025 | 1,412,000 | (624,000) | 788,000 | 669,800 | 500,000 | 169,800 |
| Oct 2025 | 1,587,000 | (698,000) | 889,000 | 755,650 | 500,000 | 255,650 |
| Nov 2025 | 1,634,000 | (712,000) | 922,000 | 783,700 | 500,000 | 283,700 |
| Dec 2025 | 1,847,000 | (918,500) | 928,500 | 789,225 | 500,000 | 289,225 |
| Jan 2026 (est.) | 1,920,000 | (840,000) | 1,080,000 | 918,000 | 500,000 | Facility constrained — LOC increase needed |
| Feb 2026 (with new facility) | 1,847,000 | (918,500) | 928,500 | 1,246,425 | 1,250,000 | — |
Trade payables · Supplier terms compliance · DPO analysis · Working capital cycle
| Aging Bucket | Balance | % of Total | Status |
|---|---|---|---|
| Current (0–30 days) | 487,000 | 70.9% | ✓ Within Terms |
| 31–60 days | 156,000 | 22.7% | ✓ Within Terms |
| 61–90 days | 44,000 | 6.4% | ⚠ Approaching late |
| 90+ days past due | — | — | ✓ None |
| Total Trade AP | 687,000 | 100% |
| Supplier | Balance | Terms | Days Outstanding | Status |
|---|---|---|---|---|
| Ferguson HVAC Supply (Dallas) | 187,000 | Net 30 | 18 | Current |
| Carrier Corporation | 124,000 | Net 30 | 24 | Current |
| Johnson Controls Inc. | 89,000 | Net 30 | 22 | Current |
| Lennox International | 76,000 | Net 45 | 31 | Current |
| Trane Technologies | 54,000 | Net 30 | 28 | Current |
| DFW Pipe & Supply | 47,000 | Net 30 | 62 | Monitor |
| Allied Mechanical Supply | 38,000 | Net 30 | 44 | Current |
| Texas Sheet Metal Works | 27,000 | Net 15 | 11 | Current |
| A&B Electrical Supply | 21,000 | Net 30 | 19 | Current |
| Other suppliers (22) | 24,000 | Various | <30 avg | Current |
| Total | 687,000 | 26 avg |
Supplier Payment Record: Zero suppliers past 90 days. Average DPO of 32 days against 30-day standard terms reflects a company paying on time without sacrificing early payment discounts. No supplier liens filed, no supply interruptions in 11 years of operation. DFW Pipe & Supply at 62 days relates to a disputed quantity on a Fort Worth Warehouse delivery — resolution expected January 2026, $44K not at risk.
| Cost Incurred (payroll + materials) | Day 0 | Cash OUT immediately |
| Application for Payment submitted | Day 7–14 | Invoice sent to GC |
| GC review + architect cert. | Day 14–21 | Processing time |
| Payment received from GC | Day 65–82 | Cash IN |
| Retainage (5%) released | Day 180–270 | After substantial completion |
| Net cash gap per $1M of revenue | ~50 days | ~$137K permanently tied up |
AP vs AR Balance: AP of $687K against AR of $1,847K gives an AP/AR ratio of 37% — healthy. The company is not using its suppliers as a bank. Net trade position (AR minus AP) = $1,160K positive, confirming robust working capital.
Robert A. Delgado · 100% Owner · Personal Guarantee · As of December 31, 2025
| Asset | Fair Market Value | Encumbrance | Net Equity |
|---|---|---|---|
| Real Estate | |||
| Primary Residence — 4812 Turtle Creek Blvd, Dallas TX 75219 | 1,240,000 | (487,000) | 753,000 |
| Rental Property — 2241 Coit Rd #104, Plano TX 75075 | 380,000 | (215,000) | 165,000 |
| Business Interests | |||
| Lone Star Mechanical Contractors LLC (100% membership interest) | 2,386,000 | — | 2,386,000 |
| Investment & Retirement Accounts | |||
| Individual Retirement Account (Fidelity) | 387,000 | — | 387,000 |
| Brokerage — Schwab taxable account | 143,000 | — | 143,000 |
| Liquid Assets | |||
| Personal checking — Frost Bank #xxxx2847 | 54,000 | — | 54,000 |
| Personal savings — Frost Bank #xxxx9341 | 35,000 | — | 35,000 |
| Personal Property | |||
| Vehicles (2024 F-150 Platinum, 2023 Tahoe, 2022 Ranger) | 112,000 | (34,000) | 78,000 |
| Personal property / furnishings | 45,000 | — | 45,000 |
| TOTAL PERSONAL ASSETS | 4,782,000 | (736,000) | 4,046,000 |
| Liability | Lender | Monthly Pmt | Balance |
|---|---|---|---|
| Mortgage Obligations | |||
| Primary residence mortgage (3.25% fixed, 17 yrs rem.) | Frost Bank | 3,241 | 487,000 |
| Rental property mortgage (4.10% fixed, 22 yrs rem.) | Chase | 1,187 | 215,000 |
| Vehicle Finance | |||
| 2024 F-150 Platinum (4.9%, 48 mo rem.) | Ford Motor Credit | 687 | 28,000 |
| 2023 Tahoe (5.1%, 19 mo rem.) | Ally Financial | 312 | 6,000 |
| Unsecured | |||
| Personal credit card — Amex Platinum (paid monthly) | Amex | — | 12,000 |
| Total Personal Liabilities | 5,427/mo | 748,000 | |
| Contingent Liabilities (Business Guarantees) | |||
| Personal guarantee — LSMC Term Loan (Frost Bank) | Frost Bank | 6,833 | 287,000 |
| Personal guarantee — proposed LOC (Frost Bank) | Frost Bank | contingent | 1,250,000 |
| Surety indemnity agreement (Travelers Bond) | Travelers | contingent | contingent |
Guarantor Strength: Personal net worth of $3.3M (excluding business) provides strong guarantee support. Liquid assets of $619K are immediately available. No judgment liens, no prior defaults, no bankruptcies. IRS tax obligations current — copies of 2023 & 2024 Form 1040 available upon request.
| Income Source | 2023 Actual | 2024 Actual | 2025 TTM | Source Document |
|---|---|---|---|---|
| W-2 Salary from LSMC | 180,000 | 200,000 | 220,000 | W-2 / payroll records |
| K-1 Distributions from LSMC | 54,000 | — | 103,000 | K-1 / Form 1065 |
| Rental income (net of mortgage/expenses) | 14,400 | 16,800 | 18,000 | Schedule E |
| Investment / dividend income | 4,200 | 6,100 | 7,400 | 1099-DIV / 1099-INT |
| Total Personal Income | 252,600 | 222,900 | 348,400 | |
| Personal debt service (mortgage + vehicles) | (56,348) | (56,348) | (65,124) | |
| Personal Disposable Income | 196,252 | 166,552 | 283,276 |
Complete schedule of indebtedness · Payment history · Maturity profile · Post-closing pro forma
| Obligation | Lender | Original Amount |
Date Originated |
Rate | Monthly Payment |
Current Balance |
Maturity | Collateral | Payment History |
|---|---|---|---|---|---|---|---|---|---|
| Senior Secured | |||||||||
| Term Loan #4821 — Equipment & vehicles (3 vans, fabrication equipment) | Frost Bank | 500,000 | Aug 2022 | P+0.50% (8.0%) | 6,833 | 287,000 | Aug 2029 | Spec. equip. lien | 0×30 |
| Revolving LOC — Working capital (existing) | Frost Bank | 500,000 | Mar 2020 | P+0.75% (8.25%) | interest only | — | Annual | Blanket lien | 0×30 |
| Operating Leases (ASC 842 — Capitalized on Balance Sheet) | |||||||||
| Warehouse & Yard — 2847 Stemmons Fwy, Dallas (3,800 sq ft + yard) | CBRE / Private LL | n/a | Feb 2022 | Fixed | 9,000 | 108,000 | Jan 2030 | n/a (operating) | 0×30 |
| Finance Leases — Vehicles (ASC 842) | |||||||||
| 2023 Ford Transit (service van ×1) | Ford Motor Credit | 38,000 | Jan 2023 | 4.9% | 687 | 14,200 | Jan 2028 | Vehicle title | 0×30 |
| 2023 Ford F-350 (field supervisor) | Ford Motor Credit | 58,000 | Mar 2023 | 5.1% | 892 | 28,400 | Mar 2028 | Vehicle title | 0×30 |
| 2024 Chevrolet Silverado (project manager) | GM Financial | 52,000 | Jun 2024 | 5.9% | 934 | 43,600 | Jun 2029 | Vehicle title | 0×30 |
| 2022 Ford Ranger (estimating) | Ford Motor Credit | 34,000 | Aug 2022 | 4.2% | 498 | 5,800 | Aug 2026 | Vehicle title | 0×30 |
| Total Existing Obligations | $18,844/mo | $487,000 | |||||||
| Proposed: Revolving LOC increase to $1,250,000 | Frost Bank | 1,250,000 | Proposed | P+0.75% | interest only (~$2,750 if 40% drawn) | — | Annual | Blanket lien | n/a |
| Annual Debt Service (Pro Forma) | |
| Term loan (principal + interest) | 82,000 |
| Warehouse lease | 108,000 |
| Vehicle finance leases (4) | 30,132 |
| Proposed LOC interest (avg $400K drawn × 8.25%) | 33,000 |
| Total Annual Debt Service | 253,132 |
| Adjusted EBITDA (available for debt service) | 667,000 |
| Pro Forma DSCR (post-close) | 2.63× |
| Covenant minimum | 1.25× |
DSCR post-close 2.63× — even including the full proposed LOC interest at an assumed 40% average draw, covenant is met with 110% headroom. If LOC is fully drawn ($1.25M), DSCR = 2.31× — still 85% above the covenant minimum.
| Period | Term Loan | LOC Activity | Status |
|---|---|---|---|
| 2024 Q4 | Current — 0×30 | Max drawn: $180K | Clean |
| 2024 Q3 | Current — 0×30 | Max drawn: $340K | Clean |
| 2024 Q2 | Current — 0×30 | Max drawn: $420K | Clean |
| 2024 Q1 | Current — 0×30 | Max drawn: $180K | Clean |
| FY2023 | Current — 0×30 | Max drawn: $380K | Clean |
| FY2022 | Current — 0×30 | Max drawn: $290K | Clean |
Zero derogatory marks across all Frost Bank facilities since 2017 (9-year relationship). The LOC has been drawn and repaid in full each year — demonstrating the seasonal working capital pattern and the company's ability to manage the facility responsibly. Peak draw of $420K in Q2 2024 confirms the proposed $1.25M increase is rational and well within management's operational capability.
Complete checklist of submitted documents · Outstanding items · Certification statement
| Document | Period / Date | Status |
|---|---|---|
| Financial Statements (LSMC) | ||
| Income Statement — 3-year summary | FY2023 / FY2024 / FY2025 | ✓ Included p.3 |
| Balance Sheet | Dec 31, 2025 | ✓ Included p.4 |
| WIP Schedule (ASC 606) | Dec 31, 2025 | ✓ Included p.5 |
| Accounts Receivable Aging | Dec 31, 2025 | ✓ Included p.6 |
| Accounts Payable Aging | Dec 31, 2025 | ✓ Included p.12 |
| 13-Week Cash Flow Forecast | Jan–Mar 2026 | ✓ Included p.7 |
| Borrowing Base Certificate | Feb 2026 | ✓ Included p.11 |
| Debt Service Coverage Analysis | TTM Dec 2025 | ✓ Included p.8 |
| Covenant Stress Test (5 scenarios) | Feb 2026 | ✓ Included p.8 |
| Backlog & Pipeline Report | Feb 2026 | ✓ Included p.9 |
| Business Debt Schedule | Feb 2026 | ✓ Included p.14 |
| Guarantor Documents | ||
| Personal Financial Statement — R.A. Delgado | Dec 31, 2025 | ✓ Included p.13 |
| Document | Availability |
|---|---|
| Tax Returns | |
| Business tax returns — Form 1065 (3 years) | FY2022/23/24 — ready to provide |
| Personal tax returns — Form 1040 (2 years) | FY2023/24 — ready to provide |
| Bank Statements | |
| Business bank statements — Frost Bank | 12 months — ready to provide |
| Personal bank statements — R.A. Delgado | 3 months — ready to provide |
| Legal & Licensing | |
| Articles of Organization (LLC) | Available |
| Operating Agreement (executed) | Available |
| TX TACL License #B12847E | Current · expires Dec 2026 |
| TX Plumbing License M-22483 | Current · expires Mar 2027 |
| ACORD Certificate of Insurance (GL, WC) | Available — Chubb policy |
| Bonding & Surety | |
| Travelers surety capacity letter | $12M single / $30M aggregate |
| Bond schedule — active projects | Available from PCL Bonding |
| Contracts | |
| Signed contract — Fort Worth Warehouse (DPR) | Available — $3.2M |
| Signed contract — Las Colinas Office (Turner) | Available — $1.4M |
| Award letter — Addison Corporate Campus | Available |