Magnet Capital is a federally licensed SBIC.
We manage a Mezzanine Fund of over $20 million and are seeking investment and lending opportunities
with existing companies that are seeking capital for growth, expansion and buyout.
Investment Strategy
Mezzanine capital, also known as "Subordinated Debt "
is generally considered a
hybrid of debt and equity. It is a loan that is often unsecured (or minimally secured)
and is at greater risk than "senior debt " that is customarily provided by
banks, lease
companies, asset lenders and other similar sources. In addition to little or no collateral,
"Mezzanine Debt " is customarily subordinate to other lenders in payment. This means that
repayment of this debt only occurs after senior lenders are repaid or with their permission.
While "Mezzanine Debt " looks and behaves like conventional debt, senior lenders will often
treat it as equity and will count towards equity in many of their financial calculations and
covenants such as debt/worth
Mezzanine Financing is a good choice for...
- Emerging companies with established sales or product and market presence
- Ownership buyouts, either in full or in part
- Acquisitions of business and product lines or entire companies where significant goodwill
or other intangibles make it difficult to obtain conventional loans
Transactions
- Investments from $250,000 to $1,500,000
- 5 year capital in the form of subordinated debt with bonus or warrant features
- In some cases - short term or contract financing as short as 1 year
Benefits of obtaining capital from Magnet Capital
- Loan terms that are usually "interest only" allowing precious operating cash to be maximized
- Mezzanine debt provides capital over and above what traditional lenders can provide
- Traditional financial ratios and collateral coverage is often not required
- We can often assist in introducing senior lenders and equity investors to the business
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About Us
