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Structured Lending

Senior-secured loans made by Cembrus offer qualified borrowers compelling options to conventional bank loans or mezzanine financing. These loans are less costly than mezzanine debt, are usually non-equity dilutive and offer companies that have been denied traditional bank funding a clear path to funding. They are particularly appropriate for companies that want to avoid equity dilution.

Companies that qualify for senior-secured loans are characterized by:

    • Failure to qualify for traditional bank loans
    • Significant equity/assets or positive enterprise value
    • Recent turnaround, cash flow or projected cash flow
    • In workout or special assets with current lender
    • In an out of favor industry for traditional bank lenders; this changes regularly with banks
    • Desire to restructure out of bankruptcy
    • Retention of excess cash flow or working capital

If your company has some of these characteristics, contact Cembrus to explore your options and evaluate some of our unique structured lending solutions.

What is a “Senior Loan?”

Senior loans are credit extensions to companies that don’t qualify for traditional lending options. The term “senior” indicates that they’re secured by all of the borrower’s assets with a first priority or senior lien. In other words, the debt retains first priority when payments come due.

Senior loans typically feature a higher interest rate than bank rates because they’re backed by private money. Interest rates on senior loans can change based on market interest rate fluctuations. For the lender, a senior loan offers less risk because of the senior priority attributes.

Senior loans are not traded on public exchanges. They’re privately issued and traded directly among private money sources, investment banks and institutional investors.