Mezz Debt for Roll Up in Lower Market

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April 14, 2026

by a searcher from University of Virginia-Darden - Darden School of Business in Charlottesville, VA, USA

We’re currently pursuing a roll-up in a B2C home services niche, with two platforms under LOI (EBITDA ~$500K–$1.2M each). We’re evaluating capital structures in the ~50–70% leverage range across senior (bank/SBA) and subordinated/mezzanine options. For those with experience in this size range: Are deals of this scale typically viable for mezzanine providers? If so, what portion of the capital stack do they realistically cover (e.g., % of total debt or EV)? Any structural considerations or minimum thresholds we should be aware of before engaging? Appreciate any perspective from those who have executed in this lower middle-market band.
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Reply by a searcher
from Columbia University in New York, NY, USA
If you can add 2-3 more potential targets to your roll-up pipeline, this will be of interest to a long list of mezz providers. The limitations will be as follows: min check of $5-7.5m, leverage up to 4.5x EBITDA, LTV less than 65%
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Reply by a lender
from University of Southern California in Los Angeles, California, USA
Hi ^redacted‌ - What is the reason for just not doing only SBA. We can get to 90%/10% Down or 90% SBA/5% full standby seller note/5% down on the SBA debt. What is the reason for wanting mezzanine debt. It's typically more expensive.
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