All businesses go through cycles which require various levels of investment along their growth journey. Starting out, businesses need venture capital to build the product and attain market validation. Once proven, businesses need growth equity or growth debt to jumpstart their commercialization roll out.
Accounts Receivable factoring, also called Invoice discounting, is a fixture of private credit markets. Usually reserved for companies deemed non-bankable, factoring offers companies valuable capital access against their accounts receivable. Post-pandemic, due to historical losses and stressed supply chains, many companies find themselves simultaneously balancing their lack of cash with the need for more capital.
Acquisition financing structures usually have several layers of different forms of capital. Most garden variety acquisition financing structures contain a blend of debt and equity capital. Within the debt capital stack, there can be one or more kinds of debt, ranging from bank loans to mezzanine loans.
All growth-oriented middle market companies have big plans which require large amounts of capital. The capital raise step in funding growth is a mission critical element and requires absolute certainty to ensure a sound and timely scale-up. Mezzanine debt lenders are excellent options for middle market companies when banks regard the capital request as too aggressive.
Independent leveraged buyout sponsors are a diverse group with many of them characterized as fundless or search fund sponsors. Fundless sponsors have no equity money of their own, but first find their acquisition target and then raise equity and debt to close the leveraged buyout.