Skip Barber Racing School Recapitalization

L. R. Nathan Associates has completed the successful recapitalization of Skip Barber Racing Schools. "Skip Barber" is the premier brand name in the field of road racing education for both aspiring professionals and amateur enthusiasts. Racing school venues and national race events are offered at five base tracks across the USA, from Lime Rock Park in Connecticut to Mazda Raceway Laguna Seca in California.


The purpose of the financing was to restructure the company's balance sheet to provide for seasonal working capital and to fund growth initiatives. The mix of funding sources demonstrates the role of mezzanine financing in a business with strong cash flow but minimal hard asset collateral. In this instance, $3.5 million of the total $4.5 million transaction was provided by patient (7 yr. term, 5 yrs. interest-only), long-term subordinated debt, which is junior to a $1 million secured bank credit line. The end result provides the financial flexibility to enable management to pursue creative new programs and to maintain the prominence of the Skip Barber brand.