Not Your Average Business Loan – Mezzanine Boosts for a Booming Business

If you want your business to explode, avoid the loans that might make it implode. Bank loans are not the only option you have.

A mezzanine lender could be the match to ignite your booming business. The question is, what is it that mezzanine financing can do for your business that other loans cannot?

First things first, how do these lenders differ from banks? For one, they give you more money than a bank loan without you having to worry about collateral.

In addition, you can have anywhere between two and five years before beginning to repay the lender. So, if you’re looking for an option that is low risk and (hopefully) high reward, mezzanine may be your best bet.

Who’s watching your assets? You! Mezzanine lenders fund off of your cash flow, not your assets. If your business plans go awry, and you cannot return the amount borrowed during the term, the lender is usually patient about receiving repayment until the business gets back on track.

Because the lender is reliant on cash flow with little collateral to support their loan, they need to give you room to work things out. If the business ultimately fails, the lender tries to salvage value through a sale or a restructuring.

Considering the possible outcomes with a bank loan, however, that’s not a bad deal. A bad breakup with a bank can is like an ugly divorce, and can lead to long lasting damage to the business.

Mezzanine lenders are more relaxed in a break-up scenario due to their need to preserve cash flow value. In the grand scheme of things, a mezzanine lender wants to see you succeed as much as you do.

They will wait for the return of their loan principal and give you the ability to focus on igniting the spark that lights up your entrepreneurial dreams. So, are you seeing fireworks yet? If you want to learn more, contact me at [email protected]