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Mezzanine Loans

About Mezzanine Loans

A mezzanine loan is a subordinate, non-traditional loan that blends equity and debt. It has its advantages and disadvantages, one of the latter being that a business might have to sacrifice equity. The interest is high, but it is tax-deductible. Typically, mezzanine loans are granted to companies that have a track record of success and are rapidly expanding.

  • Tax-deductible Interest Payment
  • Blend of Equity and Debt
  • Increase in Capital

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Mezzanine Loans
Mezzanine Loans

Why do businesses need Mezzanine Loans?

With mezzanine financing, companies that are expanding rapidly can receive funding without the rigid terms that are associated with traditional bank business capital loans. They are then able to support their growth and increase in value. Sometimes this expansion involves the acquisition of another company. A business with a track record of growth and a need to expand rapidly is a prime candidate for mezzanine financing.

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Who is Alternative Funding?

Alternative Funding Group is the most trusted mezzanine financing provider and lender of hassle-free business loans. The number of businesses we have worked with is commensurate with our willingness to help small businesses and entrepreneurs. It demonstrates our understanding of the unique needs and challenges that are found in various industries. No company is the same, and neither is every industry. At Alternative Funding Group, we pride ourselves in helping make business possible for companies as diverse as you can imagine.

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Mezzanine Loans
Mezzanine Loans

How can Alternative Funding help businesses with Mezzanine Loans?

Simply put, it is what we do. At Alternative Funding Group, we provide the loans that rapidly expanding businesses need. And with flexible terms and payment options, we do it without adding any headaches into the equation! Our knowledgeable financial assessors and US business funding consultants do all they can to make it a hassle-free experience so that you can focus on doing what you do best – tend to a growing business. 

 

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Recommendations From Other Businesses

Cash flow is one of the most important aspects of any business. Alternative Funding has helped our company stay in front of all of our positive cash flow needs. These guys are very helpful, sincere, knowledgeable and go beyond what we expected to assist our company

Kyle C.

We have worked with Alternative Funding for 15+ years. They have been wonderful to work with. Very professional staff and always friendly and easy to access for help when needed. We have always been 100% satisfied with the services they provide us. We would recommend them to anyone needing this kind of financing.

Mariah W.

Service was quick and the rep. Did an excellent job of explaining everything and answering all the questions I had. Great company. Would highly recommend.

Alexa R.

FREQUENTLY ASKED QUESTIONS

Get answers to questions from our other clients

What is a Mezzanine loan?

Mezzanine loans are subordinate, non-traditional loans that combine debt and equity. They have high, but tax-deductible interest rates and are typically granted to rapidly-expanding businesses that have a track record of success. As a nontraditional business funding option, mezzanine financing is not associated with all of the rigid terms and conditions of traditional funding solutions. When a significant amount of capital is needed for a project or business acquisition, they are a viable business funding option. Oftentimes, traditional lenders are not even willing to meet the need.

How do Mezzanine loans work?

Mezzanine loans are subordinate, high-risk loans that blend equity and debt. If there is a default, the lender has a right to an equity interest in the company after senior lenders are paid. If the borrower goes out of business, the mezzanine lender is forced to take a loss if no assets remain after senior debt is paid off. The high-risk nature of a mezzanine loan translates into high interest rates. However, the interest is tax-deductible. Additionally, it can be figured into the loan’s balance and deferred if a scheduled interest payment cannot be made.

What are the pros and cons of mezzanine financing?

For the borrower, one con of mezzanine financing is that the interest rate is high. However, it is tax deductible. In addition, interest can be rolled into the loan balance and deferred for a period of time if a scheduled interest payment cannot be made. That is not an option with senior debt. And even though the interest rates are high, a company that grows quickly can restructure its mezzanine loan(s) into a senior loan with a lower interest rate.

*Due to differing bank policies, it can take several business days before your funds are available.

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