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What is mezzanine finance?

Mezzanine finance is a form of junior debt that ranks behind senior debt in priority, but ahead of trade creditors or equity (shares). Mezzanine lenders like Marshbell Group may take share warrants in the borrowing company so that they can benefit from the equity 'upside'. This equity upside entitles lenders to a share of the company's profits in the future. We tailor our mezzanine finance to each individual deal, and our focus is on maximising your leverage, and therefore your return on capital employed.

When is mezzanine finance used?

Mezzanine finance has traditionally been used in complex deals like management buy-outs (MBOs).
Mezzanine finance is normally made up of a term loan, which is subordinated to senior debt. If it is secured, it is usually secured on the same terms as the senior debt. Mezzanine finance may be used to fill a funding gap between what senior lenders can lend and what a private equity sponsor will itself invest.

What type of interest is payable under mezzanine financing?

Mezzanine lenders may recoup their investment through cash or 'payment-in-kind' (PIK) interest, as well as through shares in the borrower.
Cash interest is a periodic payment based on the percentage of outstanding borrowing. The amount of interest may be fixed or may fluctuate via a 'margin ratchet'

What kind of asset protections will Marshbell seek?

In addition to security as first charge on the borrower's asset, Marshbell may seek the right to appoint an observer to the borrower's board of directors.

What is warrantless mezzanine finance?

Marshbell may take share warrants that give us the right to subscribe for shares in the borrower at the time of a sale or IPO.

How long does it take for me to get my Mezzanine loan?

It usually takes between 7-10 working days to receive your credit loan facility.

What assets do we finance?

We can provide alternative assets finance to help you buy and develop high value assets. We can also help you to use alternative assets as collateral for other projects.

What costs are involved in having a Mezzanine loan?

For Mezzanine deals, there is usually an arrangement fee, which is only payable once you have your credit facility. Therefore, if you do not receive your Mezzanine loan, there are no fees to pay.

What are your typical Mezzanine financing rates?

Our underwriters can offer market-leading mezzanine funding, fast, and our rates are based on the level of risk we may be exposed to.

Can you arrange Mezzanine loans for limited companies and partnerships?

Absolutely. We predominantly only work with corporate entities, provided that there is sufficient security for us to take on a first legal charge.

Can I pay back my Mezzanine loan early?

Yes, you can pay back your Mezzanine loan early, and the difference in interest will be reflected in your final redemption schedule.

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