Is your hotel and lodging business looking for funding support to achieve your growth goals? Are you frustrated by the repeated rejections of your loan application by banks and traditional lending services?
Try using a different approach. There are alternative lending options available in Alaska now to help you get the funds you need to grow your business and remain relevant in a highly competitive industry. A mezzanine loan is a type of financing that can help you get your business on track.
What is Mezzanine Funding?
Mezzanine financing gets its name from its place in the capital structure. It is a form of subordinated debt or preferred equity. The lenders may also ask for some participation rights in the common equity of your business. It is a good option because of its longer-term (typically lasts or around eight years).
This key feature of a mezzanine loan allows businesses to choose this option. They get the time to manage their business and finances better during this period. They can aim to increase cash flow to refinance the mezzanine capital over time.
A Convenient Way of Managing Your Financial Issues
You cannot waste precious time waiting for banks and traditional lenders to consider your loan application positively. If you have to get going again, you must look at ways of raising money quickly. Mezzanine funding can be just the kind of business funding in Alaska that your hotel and lodging business needs to achieve your business goals and grow at a healthy pace.
The Key Benefits Of Using Mezzanine Loan
- A mezzanine loan funded recapitalization can help retain majority control of the company
- Mezzanine financing is a more flexible option than traditional bank loans. You can achieve goals that need heavy funding, which a senior debt option cannot provide
- It is less dilutive and certainly less costly than a direct equity issuance
- With a mezzanine loan, companies have an alternative capital resource to senior debt and equity
- Known as ‘patience capital,’ it supports long-term growth.
- There is no amortization, and interest is charged only for seven or eight years,
- You benefit from the lack of any control over your business activities
Mezzanine financing can help achieve the following goals
- To manage sudden and unexpected expenses
- To expand your business by acquiring another hotel or lodge
- To pay off debts and make a clean start
Mezzanine loans are more expensive than senior debt but cheaper than equity. It can be said that it is a hybrid form of the two. This is a business funding structure to include cash and equity in nominal amounts. The maturity comes with no amortization during the term of the loan.
There are many alternative funding companies offering mezzanine loan options in Alaska. But if you want a truly smooth and hassle-free experience, choose a funding service that has many years of experience in this type of funding. Search for ‘funding for business near me’ to locate a funding service near your business location in Alaska. You must also look at the track record of your chosen service to make sure they provide mezzanine loans on terms that favor your business needs and situation.