Structured Debt $3 million – $75 million
What is structured debt?
Structured debt refers to larger loans that need a more hands on, out of the box type of underwriting. These are growth companies with minimum gross sales of $3,000,000 who are looking to take the next step but they don’t have the cash flow or length of time in business to get enough money through traditional debt financing.
There is no set way the deal could be structured but it’s usually phased out over a period of time and money is released in tranches.
How does it work?
Its comes down to the type of business or industry and the long-term goals of the business. The business owner must have a solid foundation and a certain level of savoy. If there is a clear picture painted of why the business is where it is today and why it can double or triple gross sales once it solves its short-term problems, then there is an opportunity. You must know your numbers, have a clear vision of your goals and be able to articulate that with confidence and be able to prove that it is a feasible proposition.
How long does it take?
Structured debt is a bit more complex but not difficult by any means, it could take as little as 30 days and as much as 60 days but in the end its worth it.
Who does this make sense for?
Companies with a proven business model and a clear idea of what they need to grow. This loan can be executed for a business that has only been in existence for 1 year if the gross sales show $2 million – $3 million in gross sales. If it’s an established business, we may want to see a higher level of cash flow. There is no canned response on what or who will qualify but if you are trending up and cash flow is the only thing keeping your business from exploding then this is a good option as you can have access to 2 or 3 times the capital you would get if you went with a standard term loan.
How do I qualify?
Typically we will need the last 3 years financials or if the business is new we take as many years that are available. We will also collect 12-month projections and a business plan or at least an Executive Summary. We start the process with just a few documents and create a conversation before we can understand everything that will be needed.
If you feel you fall into this bucket please contact a Ventury representative to discuss, each business is different and what one business needs may not be the same as another.