13 Sep, 2008
Growth Mezzanine making the buzz!
Posted by: aneeb In: Capital Funding| Mezzanine Debt| Mezzanine Debt Financing
Growth mezzanine describes the use of mezzanine debt in a new and non traditional way. Most mezzanine debt is used as the middle layer of capital in a three layered, buy-out transaction as depicted below. This structure is used when business owners are selling their businesses.
Attract Capital has taken mezzanine debt in a new direction through using it as growth capital in a two layered structure. This is done without the participation of an equity investor and results in significantly less equity dilution for the owner. In many instances, mezzanine debt can be raised with an equity warrant give up of less than 10% vs. a 50%+ give-up to an equity investor.
As the mezzanine market grows larger and more efficient, mezzanine firms are increasingly seeking these types of financing structures. As long as the deal is properly structured and presented, growth mezzanine is a viable funding option for most companies. Likely candidates are growth minded companies seeking acquisition capital or capital to support faster internal growth. To learn more about we achieve this for our clients- please refer our 5-step Capital Funding System.