Accounts Receivable Financing, Commercial Equipment Leases Purchase Order Financing
Mezzanine Financing is a broad financial term that refers to unsecured, high-yield subordinated debt or preferred stock that represents a claim on a company's assets that is senior only to that of a company's shareholders. A mezzanine loan is a hybrid of debt & equity, generally subordinate to any senior debt. The lender usually receives a much higher coupon rate then what would be on the senior debt. In addition to the higher rate, mezzanine financing usually contains a convertible feature which allows the lender to realize any gains associated with a projects success, which could further increase the total yield. Uses for Mezzanine Financing: Mezzanine Finance can be applied to many situations, such as stabilized properties, value-add and new development are the three main types of transactions, each having its own unique characteristics, where mezzanine financing can be utilized. Although the level of complexity will vary from one transaction to the next, it should be assumed that the more moving parts a transaction has, the more difficult it becomes to structure the capital stack to include the use of mezzanine financing. Financial sponsors may seek to help finance a leveraged buyout with mezzanine capital in order to reduce the amount of investment. A company in its early stage may choose to raise money with mezzanine capital if the company does not have sufficient assets to collateralize, but does not want to achieve further dilution by raising additional equity. Middle market companies may be unable to access the high yield market due to high minimum size requirements, which create a need for flexible, private mezzanine capital in the $20M-$100M range.
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"WAREHOUSE LINE ""NEW MARKET REPORTS"The National MarketThe Phoenix Market
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