Nelcons Consulting, Inc. Mergers, Acquisitions & Investment Banking for Mid-Market Business Owners Search
Mergers, Acquisitions & Investment Banking for Mid-Market Business Owners
Secure Mezzanine Capital
Along with the typical interest associated with debt, Mezzanine Capital will often include equity in the form of warrants (or equity co-investments) to the debt obligation or a debt conversion feature identical to that of a convertible bond. Mezzanine capital is a more expensive financing source for a company than secured debt or senior debt. It is more expensive because of the increased credit risk, i.e., in the event of default, mezzanine debt is less likely to be repaid in full. It is only secured by the equity of the company, and not the company's tangible assets (e.g., real property or accounts receivable). In compensation for the increased risk, mezzanine debt holders will require a higher interest payment and/or an equity stake in the company. However, this source of funding is a “less expensive” source of financing than conventional equity because the existing equity holders (usually the principal stockholders) achieve less dilution in their equity position. Typical uses of Mezzanine Capital include the following: 1) Financial sponsors may seek to support financing a leverage buyout with Mezzanine Capital in order to reduce the amount of their personal investment, 2) An early-stage company may choose to raise money with Mezzanine Capital if the company does not have sufficient assets to collateralize, but does not want to achieve further dilution by raising additional equity, or 3) Middle-market companies may be unable to access the high yield market due to high minimum size requirements, which creates a need for flexible, private Mezzanine Capital in the range of $10M to $100M.  Communicate your request to us by clicking on Submit Funding / Loan Request in the right margin.  We shepherd your request from inception through fulfillment.
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