Secured Capital Investments
You Need to Know About
MEZZANINE FINANCE Visit:www.securedcapital.com.au
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INTRODUCTION Secured Capital Investments are specialists in providing short-term loans that are property-secured for commercial and development lending. At Secured Capital, we seek to match wholesale investors with appropriate commercial borrowers to turn your investments into success. Investor funds allow for investment into specific-finance property-secured loans for either business or investment purposes. All of our investments are secured against real estate and borrowing is always carried out at conservative loan ratios. Investors benefit from a fixed income earned from the interest paid by the borrower against the loan. The investment funds will be repaid in full to investors once the loan has been completed.
HOW DOES MEZZANINE FINANCE WORK? Mezzanine financing fills the space between debt and equity, it is frequently employed in acquisitions. Mezzanine debt is typically taken on by borrowers after they have used all other available funding options. Mezzanine financing is more frequently employed by well-established businesses to finance initiatives and expansion than by startups.
Mezzanine debt can be structured in a number of different ways, the most popular of which is a legal right to convert the debt into equity in the event that it is not repaid in full or on time. Different structures for the interest percentage are possible, with certain percentages being set and others being variable. Instead of making periodic cash payments, interest can alternatively be paid via mezzanine financing by raising the entire balance.
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Mezzanine finance is a hybrid kind of financing that combines the advantages of both debt and equity. In the event of a default, it offers the lender the ability to convert their loan into equity shares.
Mezzanine debt is subordinated debt that will likely be paid off last. Only equity shares have priority over it. As a result, it is a debt with a significant risk of default and an extremely high-interest rate.
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