Can anyone speak to what "standard" terms are for a mezzanine lender to a search deal? I suspect that terms will vary deal to deal, but generalities here are welcome because there is a lack of even rough ideas on Searchfunder for mezz lending to searchers. Let's assume total enterprise value is between $5-10 million, multiple is 5x, and the check for the mezz lender is 2-3mm. Let's also assume SBA 7(a) debt is senior to the mezz.

  • If SBA interest rates are 10-11%, should I expect mezz to be 12-14%
  • What is normal minimum check size?
  • Is it standard to allow a PIK toggle?
  • What are standard amortization/maturity terms? Are balloon/bullet maturities normal?
  • Who is active in the mezz lending in the space?
  • Any other key terms we should keep in mind?