Mezzanine Financing

What is Mezzanine Financing?

Mezzanine financing is a late-stage venture capital loan, customarily employed as the final round of financing, prior to an IPO. A mezzanine loan make sense for a company expecting to go public - usually within 6 to 12 months.

This type of loan is usually structured to be repaid from proceeds of a public offerings, or to establish floor price for an IPO.

Mezzanine Financing is Ideal For:

• Companies Expecting to go Public
• Mergers and Acquisitions (M&A)
• Private Equity Buyouts
• Real Estate Developments

Connecting our clients with billions of dollars of private capital resources, over the years, is not something that happened by chance. Rather, it is the result of the combination of carefully-considered and well-written business planning documentation, well-motivated clients, and our meaningful relationships with private investment sources. Let Intrepid Private Capital Group help to connect you with the Mezzanine Financing that you need for your business.

A mezzanine loan is a hybrid of debt and equity that's typically given as a loan to the owner of a company under the agreement that if the loan is not paid back on time, the lender may convert the security into equity. This makes it a moderately risky source of capital, but there are certain benefits associated with mezzanine financing.

Mezzanine capital is often obtained by companies and entrepreneurs for the purpose of buying out another company. In the case of a leveraged buyout, mezzanine capital may be used in conjunction with other forms of security. According to Wikipedia, it is typically used to fill "financing gaps" between costly financing options like senior loans, second lien loans and high-yield financing, and equity.

Mezzanine financing is debt capital that is loaned based on the agreement that it can be converted to ownership or equity if the agreement is not met. It's often used by companies who seek to acquire other companies through buyouts and/or expand their existing operations.

Like most lenders, mezzanine lenders seek a positive return on their loan, which can come from either cash interest, payable-in-kind (PIK) interest, or ownership. Cash interest is a periodic payment that's made based on the balance of the mezzanine financing. Cash interest can have either a fixed or floating interest rate. PIK interest is another type of periodic interest that's paid on mezzanine financing, although it's paid by raising the principle amount of the interest instead of cash. Ownership, as the name suggests, is an equity stake in the company, often in the form of attached warrants or conversion feature.

For more information on obtaining mezzanine financing, mezzanine loans, or any questions regarding our funding process, feel free to Contact Us. To begin a funding application, simply follow the "Apply Now" link to get started. Intrepid Private Capital Group can help connect you with the private business funding that you need for your business or project.

Read More About Our Process Apply Now