Speedemissions Inc. — a vehicle emissions testing and safety inspections company with locations in Atlanta, Houston, St. Louis and Salt Lake City — has landed a $2-million credit line with TCA Global Credit Master Fund LP. This allows the company to borrow as much as $2 million in order to, among other things, pay trade payables and provide for working capital. This loan agreement replaces an existing $100,000 revolving line of credit loan agreement with Regions Bank.
“This credit line with TCA will allow us to execute the new strategic initiatives, which we expect to announce prior to the end of the second quarter; improve store operations; and move the company toward increasing revenue and profitability,” said Rich Parlontieri, president and CEO of Speedemissions. “What’s also exciting is that we should be able to properly market our CARbonga-SRI app.”
CARbonga is an iPhone/iPad/iPod Touch application designed to test the functionality of a car’s operating systems.
The terms of the loan agreement include an initial maturity date of six months or Dec. 8, 2012, with an automatic six-month extension to June 8, 2013, subject to terms and conditions contained in the agreement. The loan is collateralized by Speedemissions’ inventory, accounts, equipment, general intangibles and fixtures.
Speedemissions has already made an initial draw of $350,000 under the new loan agreement, according to a filing with the SEC.
This comes at a time when the company is working on some new initiatives to deal with increased competition following revisions in emission-testing laws in some of its markets. In attempt to mitigate the plethora of new competitors, Speedemissions has launched a program to cut operating expenses at both the corporate and store level, which is expected to involve the closure of underperforming stores. The company also has stepped up the sale of products such as windshield wipers and light bulbs, and plans to add other automotive services sometime this year.