Recapitalization as an Estate Planning Strategy

Recapitalization as an Estate Planning Strategy

For a typical business owner, their Company grows to become the family’s largest asset over time. As with any concentration issue, that can be financially risky. Though wealth concentration is classified as a “high-class problem”, the business owner has worked hard to build the enterprise ...
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Making the Case for Lower-Middle Market M&A

Making the Case for Lower-Middle Market M&A

Making the Case for Lower-Middle Market M&A When thinking about Mergers and Acquisitions (“M&A”) in the traditional sense, one might imagine large, multinational companies combining due to lack-luster organic growth opportunities or to increase economies of scale. While this may ...
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Loan Covenants Explained

Loan Covenants Explained

When a lender makes a loan they typically ask the borrower for “covenants” to protect their position. A loan covenant is simply a promise by the borrower to the lender to help set expectations and guide future behavior. They are generally classified as either operational or financial and ...
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What is Payment In Kind (PIK) Loan Interest?

What is Payment In Kind (PIK) Loan Interest?

What is Payment In Kind (PIK) Loan Interest? Payment In Kind, or PIK, is an often misunderstood topic in leveraged finance. In the industry it is used to describe interest that can be paid by a borrower in a deferred manner via the issuance of additional securities instead of the more typical ...
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The Basics and Functions of Mezzanine Debt

The Basics and Functions of Mezzanine Debt

Understanding the basics and functions of mezzanine debt can be helpful when a business owner is considering making a major investment, buying out a partner, or planning for the transfer of a family business to the next generation.  Mezzanine debt, a combination of typical bank debt and ...
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Mezzanine Debt as a Source of Growth Capital

Mezzanine Debt as a Source of Growth Capital

Growth Capital is often the missing puzzle piece to complement a great strategy, management team and business.   Mezzanine debt is often used by profitable private companies as growth capital because it positions the balance sheet for growth.  The interest only non-amortizing nature of ...
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