Solving Complex Problems: The unique structure offered by New York Private Finance has helped our clients solve complex problems that would have otherwise been left unsolved by traditional capital sources.  In one notable case, our client, the owner and operator of a landfill management business, had just received debt funding to pursue an acquisition/roll-up strategy.  The terms of the deal were such that his personal distributions were heavily restricted for several years, until certain milestones were reached.  Meanwhile, our client had another start-up business which required significant capital investment to get it up and running.  NYPF was able to structure a transaction in which we lent the money to him personally, using his equity in his primary business as collateral.  This enabled our client to make the necessary investments into the start-up business while maintaining compliance with his primary business’s debt covenants.  In this case, our client’s only alternative would have been to raise equity capital, causing a loss of ownership and control, and which would have ultimately ended up costing him more.

Innovative Structured Lending: This is just one of the ways that NYPF’s innovative structure of lending to entrepreneurs and investors against private equity and other illiquid assets can come into play.  In general, our facilities are structured on a medium-term basis (three to six years) and range from $5 million to $35 million in size.  The cost of our loans is a current interest coupon of Libor + 7.5% in addition to a shadow equity component which takes the form of a participating interest payment that is settled in cash at maturity or repayment.

Each Loan Unique: Our loans are priced to be cheaper than traditional mezzanine, and they do not compete with senior bank debt at the operating company level.  We seek no warrants, board seats, or control over our clients’ businesses whatsoever and design our facilities to be growth-friendly.  Amortization is typically matched to the unique circumstances of each transaction, and can be linked to planned future sales or liquidity events.

To find out more about how our structured loans might solve your client’s capital and liquidity needs, feel free to contact Brian Bristol or visit our website.