Our Solutions
Our Solutions
MEZZANINE FINANCING (SUBORDINATED DEBT)
Mezzanine financing is a versatile financing option that offers businesses the capital they require to achieve their ambitious goals without diluting ownership or losing control.
It can provide a unique avenue to access additional funds for projects such as acquisitions, expansions, refinancing, or capital-intensive endeavors. This financial instrument is designed to complement existing debt structures while offering potential benefits that go beyond traditional lending.
Why Mezzanine (Sub Debt)?
Mezzanine financing empowers businesses to capitalize on opportunities that might have been out of reach with traditional debt financing alone. Its hybrid nature offers the best of both worlds: additional capital injection with the flexibility to pursue strategic growth initiatives.
How does it work?
Mezzanine financing is a hybrid financial instrument that combines elements of both debt and equity. It sits between traditional senior debt (bank loans) and equity investments.
Here’s a glimpse into how Mezzanine Financing typically operates:
- Borrower's Need Assessment: Businesses identify strategic growth opportunities or projects that require substantial funding beyond what traditional debt can provide. Mezzanine financing is often used to bridge the funding gap.
- Structuring the Deal: Mezzanine financing is structured as a loan agreement, but it can also include an equity component. The loan might come with an attached equity warrant or an option to convert the debt into equity later.
- Equity Participation: The unique aspect of mezzanine financing is the equity participation. Lenders might receive a small ownership stake in the business, either directly or through warrants, which grant them the option to purchase equity at a future date.
- Potential Benefits: Mezzanine financing allows businesses to access a higher amount of capital than traditional loans might offer. It provides flexibility in structuring payments and can enhance the overall return on investment if the business succeeds.
- Exit Strategies: Mezzanine financing usually has a set term, often ranging from 5 to 7 years. At the end of the term, businesses can choose to refinance, repay the loan, or, in some cases, convert the debt into equity.
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MEZZANINE
FAQ
Mezzanine financing includes an equity participation component, giving lenders potential ownership stakes. Interest rates are higher due to the increased risk.
The equity component can include equity warrants, convertible debt, or options to convert the loan into equity later.
Mezzanine financing provides access to additional capital beyond traditional loans, without diluting ownership significantly. It’s flexible and can enhance overall returns.
Mezzanine financing is structured as a loan agreement with terms outlining interest rates, repayment structure, equity participation, and exit strategies.
Yes, mezzanine financing can be used for real estate projects, such as property acquisitions or developments.
Mezzanine financing is subject to regulatory considerations, especially when equity aspects are involved. Consultation with legal experts is recommended.
Why Amrock Financial?
AmRock Financial hasprovided $1 billion + in financing to more than 400+ small and mid-sized businesses in the US and Canada over the last 16 years, working with a pre-approved network of 1700+banks and Non-bank lenders nationwide.
If you are looking for a business loan, refinancing, or additional working capital, we provide Debt Structures from $1 million to $100 million.
Although banks have reduced lending in today’s market there are many other funding options available to you.
If you’re interested in scheduling a 30 min introductory call, book a meeting here:
Overview of our
Financial Solutions
If you’re in need of financing for your business, asset-based lending provides a unique and flexible solution leveraging your company’s tangible assets.
If you’re a small business owner seeking financing, the U.S. Small Business Administration (SBA) offers a range of loan programs to access affordable capital with favorable terms and flexible repayment options.
Factoring can be a valuable financing solution to improve cash flow. Convert your accounts receivable into immediate cash to optimize your cash flow.
Whether you’re an aviation enthusiast or a business professional seeking to acquire an aircraft, we’re here to guide you through the process.
A specialized financing option designed to help businesses cover the costs of fulfilling customer orders without depleting their working capital.
Trade financing can provide you with the necessary working capital solutions, and risk management tools to navigate the complexities of the global marketplace.
- 1001 Brickell Bay Drive 27th Floor Miami, Florida 33131
- 305-440-8480
- applications@amrockfinancial.com