Senior debt (line of credit, term loan or capital lease) is collateralized by a first lien on the current and long-term assets of the company. If the company has stable cash flows, the lender may provide additional funds above the collateral coverage. Lenders consider EBITDA as a proxy for the company's cash flow, and will lend up to a certain multiple of EBITDA. This multiple will vary greatly between industries and is dependent on the company's health and competitive position. For purposes of performing a preliminary analysis, three times EBITDA is a median multiple for senior term debt.

Characteristics

Up to $800MM
Enterprise value between $20MM and $2BN
Ebitda > $4MM
Asset backed - First Lien
Rapid amortization
Cash flow predictability to service debt
Financial covenants put in place
Possible personal guarantees
Takes priority over other debt securities
No equity dilution

Terms

3-5 year term
60% to 85% lent against appraised fair market value of land and buildings
40% to 90% lent against liquidation value of plant, machinery and equipment
Debt coverage greater than 1.5
Prime plus 2% to 5%- fixed or floating

If you would like to explore how our Senior Debt Program may be of value to your company, please give us a call at 818-591-0753 USA (West Coast) or 646 358 3469 USA (East Coast) or +353 65 684 5862 or contact us

(Program descriptions, terms, benefits and characteristics are subject to market change)