Most entrepreneurs are familiar with the concepts of equity and debt financing. However, sometimes the type of funding needed falls somewhere between the two. Falcon Americas Finance offers mezzanine financing, which combines the most advantageous parts of equity and debt programs to provide the most complete financial coverage.
How Our Mezzanine Financing Program Works
Mezzanine financing is a subordinated loan, which typically stands much lower in the hierarchy of creditors. Because mezzanine loans carry more risk, there is usually a higher expected return, which can be:
• Payable In Kind (PIK) interest, where the interest is added to the principal
• Cash Interest, where the balance of the mezzanine loan can be arranged with fixed or variable interest rates, and paid down periodically
• Equity stake, where the lender has the right to convert the mezzanine loan into partial ownership, which removes debt from the balance sheet
Common Uses for Mezzanine Financing
Many entrepreneurs associate mezzanine financing with development projects for commercial real estate properties. However, mezzanine financing can also be used as supplemental funding for acquisitions and mergers, or a leveraged buyout.
Contact Falcon Americas Finance Today
If you would like to learn more about mezzanine financing, and how it can benefit your next project, contact our offices. Our team will work with you directly to structure a financing solution to help you meet your goals.