Elevate Your Business with Mezzanine Finance Solutions
Our tailored mezzanine financing options provide the capital and flexibility you need to expand operations, pursue acquisitions, or invest in new opportunities.
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At FinLender, we understand the intricacies of complex transactions and leverage our extensive network and industry knowledge to optimize the Company funding structure. With our expertise in hybrid finance and mezzanine financing, we provide tailored strategies to meet your unique capital requirements. Whether you need mezzanine funding or mezzanine debt our experienced team is dedicated to structuring the ideal financial solution for your business.
Need for Mezzanine Finance
Mezzanine capital fills the gap between equity and senior debt in the capital structure of a company, which may arise due to discounting inventories, fixed assets and accounts receivable at a higher rate than before, for fear of them not realizing their value a high proportion of intangible assets in a balance sheet ceilings on debt that can be raised from a bank.
Need for Mezzanine Finance
Mezzanine capital fills the gap between equity and senior debt in the capital structure of a company, which may arise due to discounting inventories, fixed assets, and accounts receivable at a higher rate than before, for fear of them not realizing their value a high proportion of intangible assets in a balance sheet ceiling on debt that can be raised from a bank.
To raise mezzanine finance, a company must have a credible track record in the industry, consistent profitability, and a feasible plan for expansion through an initial public offering (IPO) or acquisition. Thus, mezzanine finance is used by companies that have a positive cash flow.
Maturity and Redemption
Mezzanine debt usually has a maturity period of 5 years or more. However, if the mezzanine debt is issued at the same time as the bank debt, the mezzanine debt matures after the bank debt. Furthermore, given the high RoR offered on mezzanine finance vis-à-vis traditional finance, issuers often prefer shorter maturities. Mandatory redemption/prepayment is required in the event of asset sales or a change in control transactions.
Lenders that review mezzanine financing requests closely examine several facets of the prospective borrower’s business when weighing the deal. The most important consideration examined by a mezzanine lender is the company’s capacity to generate cash flow, if it is anticipated that the business’s cash flow is sufficient to repay the loan, it is quite likely that subordinated debt can be used. In addition to cash flow, lenders also examine ownership flexibility, company history, growth strategy, and acquisition targets.