What ACTUALLY is Mezzanine Finance?
Some of us vaguely know what it is, but what ACTUALLY is mezzanine finance? Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert the debt to an equity interest. This is in the company in case of default, generally. In terms of risk, it exists between senior debt and equity.
What are the benefits of mezzanine finance?
One of the main benefits of mezzanine finance is that it provides companies with the capital they need to grow their business. This financing can be used to finance expansions or acquisitions. Plus other growth initiatives. Mezzanine financing is frequently used to restructure a company’s capital structure.
- It allows a company to borrow much more than it could receive from a debt lender on its own. Also, to ensure that it has all of the money it requires.
- Repaying principal can be delayed till later in the loan term or at maturity. This implies that only interest payments are necessary during that time. This allows a firm to use the increased cash flow to repay other debt or promote growth.
- In general, mezzanine finance allows the borrower to make more customised arrangements than traditional bank financing does.
- It may lower the equity requirement.
Commercial Mortgages UK – About Us
Answering the question ‘What ACTUALLY is Mezzanine Finance?’ is the Commercial Mortgages Store. The Commercial Mortgages Store has over 15 years’ experience in advising and arranging any type of commercial finance. We have a whole of market approach. Therefore, we use banks, building societies, private banks and commercial broker only lenders to finance our deals.
We service commercial mortgages across the whole of the UK. Plus, we can arrange commercial mortgages ranging from Bridging finance for residential or investment purposes. Also, we can help with any type of development finance, up to the popular serviced accommodation and Air B&B mortgages.