MEZZANINE FINANCING FOR PRIVATELY HELD COMPANIES
Sinoam Global Fund recommends mezzanine financing to give a business access to capital when a bank won�t finance them initially. New, profitable companies can gain capital, while improving their financial statements to the point at which they can receive a more standard bank loan. SinoAm Fund structures mezzanine financing with subordinated convertible debt and yield based preferred shares, often structured with warrants or options. Basically mezzanine financing is a combination of both debt and equity financing. The financing starts off as a debt loan and the lender can take over an equity ownership position if the loan is not paid back in full, or on schedule. Loans often carry high interest rates (20% to 30%) usually because little collateral is required. This quick turnaround time obviates the high interest rate. SinoAm Fund recommends mezzanine financing for transactions including, but not limited to management/leverage buyouts, expansion financing, acquisitions, recapitalizations and divestitures.
