growth capital loans

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Growth capital loans and mezzanine finance (sometimes called growth finance) are both flexible forms of debt financing. They are sometimes suitable for clients that may already have significant borrowings, and wish to finance a transformational change in the business.

Whilst both growth capital loans and mezzanine finance are a form of debt, each share many of the characteristics of equity.

Both are most appropriate for financing high-growth businesses, and are typically used to finance the expansion of existing companies – for product developments, penetration of new markets, infrastructure investments, or for strategic acquisitions.

Growth finance may be suitable if your business is more mature than venture capital funded companies, able to generate revenue and operating profits, but unable to generate sufficient cash to fund major expansions, acquisitions or other investments. Because of this, the owners of the business may have found relatively few alternative ways to secure capital to fund the next stage of growth.

Growth finance gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back on time and in full.

Growth capital can also be used to affect a restructuring of a company’s balance sheet, particularly to reduce the amount of interest-bearing debt. This can significantly increase the amount of cash retained in the business for working capital.