In today’s high regulated banking environment, smaller companies are having a harder time securing loans from banks. An option that middle market companies have found success with has been mezzanine lending.Mezzanine money for middle market companies is often a perfect match for their funding needs, due to the long term, patient nature of the mezzanine capital.
Lenders that provide mezzanine money for middle market companies have 5 to 6 year loan terms and require little principal repayment over the term. This allows the company to keep their cash and reinvest it in new business development to drive further growth. The loan is based upon a more liberal view of the creditworthiness of the company as mezzanine lenders look at the cash flow of the company to decide whether to make the loan.
Mezzanine money for middle market companies provides the firms with flexible terms on the loan as it related to interest accrual, prepayment, and future borrowings. Acquisitive companies often seek a mezzanine lender because they can fund the ongoing acquisition capital needs. Mezzanine money for middle market companies gives the companies a leg up in the market by providing them with the capital it needs to go forward and implement an aggressive growth plan. Mezzanine money for middle market companies also provides the company with a way to buy out an owner through a recapitalization of the business.