First National Capital, an independent provider of capital equipment and project financing in North America, structured a $12 million equipment financing solution supporting a multi-megawatt AI and GPU compute expansion for a regional colocation and hybrid data center services provider.
The client, a private equity-backed operator of multiple U.S. facilities, identified an expansion opportunity driven by accelerating enterprise demand for high-density colocation capable of supporting AI workloads. The build-out carried a single-tenant commitment and a fixed deployment deadline, and required substantial near-term capital for UPS systems, chillers, power distribution units and battery and resiliency equipment — much of it subject to extended vendor lead times and upfront deposits at the point of order.
The company was simultaneously completing a broader refinancing of its existing credit facility, creating a timing conflict between two capital events. Equipment procurement could not wait for the refinancing to close without jeopardizing the deployment schedule, while funding the equipment from working capital or the existing facility would have consumed liquidity and covenant headroom during a critical expansion.
First National structured the transaction in two stages to match the client’s sequence. An initial $6 million bridge tranche funded immediately, enabling procurement and deployment of critical infrastructure without waiting on the refinancing. Upon completion of that refinancing, First National will fund the remaining approximately $6 million and convert the bridge into a standard equipment loan, providing an uninterrupted transition from interim to permanent financing.
“In data centers, the procurement slot is the deadline,” Philip Gronnerud, senior vice president, co-founder of First National Capital, said. “The equipment market does not care what stage a company’s refinancing is in. This client had contracted demand, existing facilities and a tenant waiting — what they needed was capital that arrived on the schedule the equipment imposed rather than the schedule the credit markets preferred. Structuring around that sequence, rather than asking the client to work around ours, is what the transaction actually required.”
