Private Equity Debt question

by a searcher from Columbia University - Columbia Business School

2 years ago

Okay, I may be showing my naivete on this question, but how does a PE firm obtain non-recourse debt?  Let's say I spin out of a larger fund and have no Billion dollar family office behind me and no capital partners that have a net worth to backstop a $30M Enterprise Value investment.  I am aware of debt funds, but most of the ones I have worked with are usually a combination of mezzanine debt and equity.  Thus, how is non-recourse debt obtained in a transaction of this size (or smaller or larger)?

Thanks in advance.

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6 comments

lender from University of California, Berkeley - Haas School of Business

Concur with other commenters here as well. It largely depends on the type of industry as well and how much debt is available for the transaction vs. the PP. If you have anything specific (i.e. a business) in mind happy to be a resource! --@----.com

2 years ago | like reply | 0 likes

lender from Eastern Illinois University

I would concur with the other comments here. It really depends on the transaction size, structure, amount of equity, and collateral position. I have found it is hard to secure non-recourse on smaller sized transactions but typically once you have a larger sized request with strong backing, or really strong equity and collateral, there are lenders that will consider it. I am more than happy to discuss options at any time at --@----.com

2 years ago | like reply | 0 likes

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