Mezzanine Debt can be attractive to business owners because it does not require any collateral.
Companies that utilize mezzanine financing often already have their assets tied up with other senior debt.
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Mezzanine Financing Provides A layer of financing that fills the gap between senior debt and equity in a company
The amount of money your company can borrow with a Mezzanine Loan varies. Often, a business can receive up to 4 to 4.5 times of a company’s EBITDA (earnings before interest, taxes, depreciation, and amortization).
Few companies are able to produce assets valuable enough to secure a loan of this size, which is why our mezzanine program can shift to company equity if and when needed.
You might then use mezzanine financing to complete your company’s buyout or initiate a large-scale purchase.
Mezzanine Financing Offers Flexibility!
Because there are numerous ways Mezzanine Debt can be structured, the loan terms are negotiable for both the borrower and the lender.
In some ways, it can be thought of as a common sense loan, since both parties must agree to the terms and conditions for the deal to move forward.
Also, depending on the deal, many mezzanine financing contracts allow for interest-only payments in the beginning. This gives your company time to get the company buyout or large-scale project up and rolling.
These interest payments are generally a tax-deductible business expense for the borrower.