Most banks have decided on an asset only lending approach. This means they are unable to fund companies that lack assets. Most high quality companies are service or technology companies with strong margins and good cash flow. What most of these companies lack is a lot of assets on their balance sheets which makes it hard for them to qualify for a bank loan? This creates a funding void in the mid-market at a time when most companies are seeing good growth.
Fast growing mid-market companies are always in need of funding to fill the gap. The gap emerges as the company begins to move in an outward direction with expansionary plans such as new regions, new products and new markets. To expand, you have to lay out cash to fund additional expenses that will not immediately produce revenue and receivables. The cash you lay out will increase your market reach or productive capacity and that will lead to long term growth in the future.
Those dollars, if invested wisely, will have a long term return. But it will not help you attract more capital in the short term from a bank that requires more assets for funding. Therein lies the rub and is the root cause of the funding gap. The new breed of mezzanine lenders has filled the void to offer direct lending solutions to companies that need transitional capital to fund long term growth.
Transitional capital gives you money today to fund tomorrow’s growth, without caring about its short term effect on the balance sheet. The new breed of mezzanine lenders are able to see into the future and asses the future cash flow in a way that bank’s cannot. If you have expansion in mind and need funding to bridge your short term spending, mezzanine lenders are the best option in the market.
What We Offer
- Corporate Finance Expertise
- Vast Practical Experience
- Legendary Customer Service
Latest M&A Industry Updates!
- Current trends in Lower Middle M&A Market and Middle-market Mezzanine!
Get a Free Consultation!
- Mezzanine Funding Solutions
- Advisory Services
- End-to-end Acquisition Services