Mezzanine funding
Use of mezzanine funding
Mezzanine funding is often used as a substitute of the needed equity or a bank loan in acquisitions and development projects. The capital provided by us is usually used in the following situations:
Refinancing - change in the structure of the current financing. Short- and mid-term bank loans are substituted by a mezzanine (longer maturity of the loan, more liquidity for the instant development),
Development capital - new capital to a company to support its further growth (for example by means of establishing a new branch, acquisition of a supplier / competitor, expansion to new markets …),
Management buy-out - outstanding capital to the company management to take over the company from its original owner,
Leveraged buy-out - outstanding capital to a company or an investment fund to acquire the target company on credit,
Co-financing - Investments of the nature of a project or co-financing from euro funds – additional capital
The summarised options of our funding mentioned above are for illustration only; we may also accept other purposes. Contact us, if you are interested.
Advantages of mezzanine funding
Advantages for the client
- mezzanine funding is a “tailor-made” and stable financial instrument – a loan resistible to market turbulences,
- creditors do not loose control over their companies,
- funds provided in the case when it is impossible or very difficult to obtain a classic bank loan,
- less restrictive compared to a bank product (cash, covenants etc.),
- debt principal is usually paid as a single payment at the end of the maturity of the loan
- mezzanine funding is cheaper than own resources
Advantages for financing banks
- sufficient capital strengthens companies which were granted the loan
- mezzanine capital is subordinated to them
- a new partner in the project who protects the creditors' rights
- reduces (spreads) the risk of provisions for banks