Raising Non - Bank Debt

searcher profile

October 07, 2021

by a searcher from Northwestern University in Melbourne, FL, USA

Hi,

Has anyone raised non - bank debt from private investors? If so, what were the terms?

We should be under LOI in a few days and I would love to have a conversation with anyone that has experience doing such type of deals.

Thanks,

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commentor profile
Reply by a searcher
from University of Notre Dame in Dublin, OH, USA
Ryan - I have not done this personally, but I come from the "private credit" world. Not sure on your situation, but after a certain size threshold there are numerous non-bank firms focused on private credit. That size threshold depends on the firm; it's usually $3-5mm in EBITDA, but some will go as low as $1mm. These firms generally offer more flexibility than a bank (higher leverage, less restrictive covenants, etc.) in exchange for higher cost (interest rate, fees).

I would consider checking out the LMM directory on Axial to find potential lenders (https://www.axial.net/forum/companies/).

Depending on your size and situation, it might also make sense to find a family office or individual investor with whom you have a relationship to lend to you here. In either situation, I would expect a higher interest rate with more lax terms (as compared to a bank).
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Reply by a lender
from The University of Chicago in Chicago, IL, USA
Hi Ryan - I'm managing a social impact fund called the Good Jobs Fund that provides term loans w/ flexible terms for lower middle market companies ($1-2M EBITDA). Happy to chat w/ you. Please reach out - redacted
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