Achieve Your Business Goals That Require Capital Beyond What Lenders Will Give
Sometimes you need capital for your next big project but have maxed out what senior lenders will offer you. This is where mezzanine financing comes in handy. With this financing option you can refine and meet your company’s goals beyond what you can get from lenders. You can use this form of financing to help bridge the gap between other types of loans or to pay for things you need while you build equity.
You will need concrete business goals to keep your company moving forward at a good and steady pace. The first step is to refine your goals as quickly and effectively as possible. This means determining what your deadlines are for real estate, for example, as well as how much capital you will need. You can then see which types of funding can apply to those goals and get started filling out applications and filing paperwork.
Some common goals that companies can have which require this type of capital include acquisitions, real estate purchases and balance sheet optimization. Each of these goals can take you to the next stage of your business plan and require funds to do so.
When you need capital but have met your limit with senior lenders, mezzanine financing might be the best bet. This financing sits between equity and senior lending on the hierarchy and can have some benefits and detractions along those same lines. For instance, it can be more expensive to use mezzanine funds than senior lending funds, but you can have a longer time to pay it back and be charged only interest and not amortization during that time.
This type of financing is considered goal-oriented and temporary until senior lending funds or equity can replace the higher cost financing. You can use mezzanine funds for buyouts, acquisitions and even refinancing goals and help your company reach the next stage. The more options you have for funding, the easier it is to meet time-sensitive goals without sacrificing the growth of your company.
Mezzanine financing can be a relatively easy way to achieve your business goals, especially when you are topped out on senior level lending or are close to it. These funds can be used to purchase new locations or equipment for your company, to refinance existing loans and much more, giving you the flexibility you need with capital to meet the business goals you have.