L.O.T.W. #149 - Quest Resources Embarks on New Credit Journey with Texas Capital Bank
New $40 million ABL facility from Texas Capital Bank refinances existing ABL deal from PNC Bank.
In March 2026, Quest Resource Holding Corporation and its operating subsidiaries closed a new $40 million asset-based revolving credit facility with Texas Capital Bank, replacing an existing ABL with PNC Bank (successor to BBVA USA) that had been in place since August 2020. The new facility is formula-driven against eligible accounts receivable, priced at Term SOFR plus a margin ranging from 1.75% to 2.75% depending on leverage, and matures December 30, 2029. Simultaneously, Quest’s existing Monroe Capital term loan was amended for the eighth time to modify financial covenants.
👓At a Glance
Origination Date: March 12, 2026
Borrower: Quest Resource Management Group, LLC and Quest Equipment, LLC
Lender: Texas Capital Bank
Deal Size: $40 million; $3.5 million L/C sublimit; $10 million uncommitted accordion
Structure: Asset-based revolving credit facility (formula-based, accounts receivable)
Rate: Term SOFR + Applicable Margin (initially 2.50%; thereafter 1.75%–2.75% based on Senior Net Leverage Ratio)
Term: ~44 months
Use of Proceeds: Working capital and general corporate purposes; refinancing of PNC Bank ABL facility
Source: Press Release
📷Borrower Snapshot
Sector: Industrials
Subsector: Commercial Services & Supplies
Ownership: Public (NASDAQ - QRHC)
Commercial Stage: Revenue generating; LTM EBITDA (+)
Business Overview: Quest Resource Holding Corporation is a provider of environmental and sustainability managed services to mid-size and large enterprises across North America. The company acts as an outsourced sustainability partner, managing vendor relationships and program execution across waste diversion, recycling, regulated material handling, and other environmental compliance services. Quest earns revenue through service contracts and vendor management fees, and its accounts receivable base spans a diverse mix of corporate customers including investment-grade counterparties.
⚙️Structure & Terms
Source: SEC 8-K
Commitment: $40 million ABL Revolver (w/ $3.5 million sublimit for L/Cs)
Maturity: December 30, 2029
Collateral: First priority lien on substantially all tangible and intangible personal property of the Borrowers (ABL Priority Collateral), plus first priority pledge of capital stock and membership interests of direct and indirect subsidiaries by Guarantors; subject to Intercreditor Agreement with Monroe Capital as Term Loan Agent
Borrowing Formula:
90% of Eligible Accounts owing by Investment Grade Account Debtors
85% of Eligible Accounts owing by Non-Investment Grade Account Debtors
Rate: Term SOFR + Applicable Margin; initial Applicable Margin of 2.50% through delivery of Q2 2026 compliance certificate, then adjusted per leverage grid (see below)
| Pricing Level | Senior Net Leverage Ratio | Term SOFR Margin |
| 1 | < 2.25x | 1.75% |
| 2 | ≥ 2.25x but < 3.00x | 2.00% |
| 3 | ≥ 3.00x but < 3.75x | 2.25% |
| 4 | ≥ 3.75x but < 4.50x | 2.50% |
| 5 | ≥ 4.50x | 2.75% |
Fees:
- Unused facility fee: 0.375% per annum on the daily average unused Commitment, payable monthly in arrears
- Letter of Credit fees: equal to the Applicable Margin for Term SOFR Loans on the daily amount available to be drawn, payable monthly in arrears
- Fee letter: additional fees as set forth in the fee letter between Borrowers and Lender (**Not disclosed**)
- Default interest: Applicable Margin plus 2.00% per annum on overdue amounts
Financial Covenants:
Minimum Fixed Charge Coverage
March 31, 2026 through June 30, 2027 | 1.00x |
September 30, 2027 and December 31, 2027 | 1.05x |
March 31, 2028 and thereafter | 1.10x |
Maximum Senior Net Leverage
March 31, 2026 | 7.00x |
June 30, 2026 and September 30, 2026 | 7.25x |
December 31, 2026 | 7.00x |
March 31, 2027 and June 30, 2027 | 6.50x |
September 30, 2027 and December 31, 2027 | 6.00x |
March 31, 2028 and June 30, 2028 | 5.00x |
September 30, 2028 and December 31, 2028 | 4.50x |
March 31, 2029 and June 30, 2029 | 4.00x |
September 30, 2029 and thereafter | 3.50x |