This PowerPoint is to be viewed with that associated video located at http://www.slideshare.net/CapitalMatters/august-newsletter-24945726. Combined they provide a brief overview of mezzanine financing for profitable private companies that cannot obtain adequate financing from commercial banks. Upon completion of the tutorial, you will have gained an overview of the structure and pricing of mezzanine loans for small and medium businesses as well as the steps required to successful seek out a loan from the hundreds of providers currently available in the marketplace.

1. www.focusbankers.com
Contributor:
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274
Mezzanine
Financing
for
Smart
Guys
These
slides
are
intended
to
be
viewed
in
conjuncLon
with
the
video
presentaLon
located
at
at
hNp://www.slideshare.net/
CapitalMaNers/august-­‐newsleNer-­‐
24945726.
Combined
they
provide
a
tutorial
for
obtaining
mezzanine
financing
for
small
and
medium
businesses.
Capital
MaNers
www.capmaNers.com

2. Capital
MaNers
www.capmaNers.com
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

3. Capital
MaNers
www.capmaNers.com
Mezzanine
Debt
Summary
• Term
Loan
Subordinate
to
Bank
or
Asset
Based
Lender
• Fills
Financing
Gap
for
Profitable
OperaLng
Companies
• UnderwriLng
Based
on
OperaLng
Profits
and
Enterprise
Value
• Most
Lenders
Look
for
$2
Million
+
of
EBITDA,
but
Some
AlternaLves
for
Smaller
Companies
• Dedicated
Mezzanine
Funds,
Private
Equity
Firms
and
SBICs
• Total
Debt
(Senior
and
Mezzanine)
Three
to
Five
Times
EBITDA
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

4. Capital
MaNers
www.capmaNers.com
Mezzanine
Debt
Summary
(2)
• Three
to
Five
Years
Interest
Only,
frequently
Unsecured
• Yields
Tied
to
Company
Size
and
Perceived
Risk
• EBITDA
of
$8
Million
Highly
CompeLLve
with
Coupons
Ranging
from
High
Single
Digits
to
Low
Teens
• Smaller
Companies
–
Current
Coupon
in
Low
to
Mid-­‐teens
plus
Repurchasable
Warrants
to
take
Total
Yield
to
High
Teens
or
Low
20%
Range
• Intercreditor
Agreements
Can
be
Major
Issue
in
Gehng
a
Deal
Closed
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

5. Capital
MaNers
www.capmaNers.com
• Make
Your
Case
• IdenLfy
Your
Prospects
• Make
Contact
• Share
the
Info
• Follow
Up
• Sell
the
Value
• NegoLate
the
Deal
• Support
Due
Diligence
• Manage
the
Lawyers
• Push
to
Close
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

6. Capital
MaNers
www.capmaNers.com
• Making
Your
Case
 Due
Diligence
 Telling
the
Story
 Modelling
the
Numbers
 CIM
 PowerPoint
 Deal
Summary
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

7. Capital
MaNers
www.capmaNers.com
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

8. Capital
MaNers
www.capmaNers.com
• IdenLfying
the
Prospects
• Proprietary
Lists
• Databases
• Web
Research
• Axial
Market
• Networking
• CollaberaLon
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

9. Capital
MaNers
www.capmaNers.com
• Making
Contact
• Email
• Snail
Mail
• Phone
Calls
• Phone
Calls
• Phone
Calls
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

10. Capital
MaNers
www.capmaNers.com
• Sharing
Info
• Blind
Summary
• HighlighLng
Calls
• NDAs
• Conference
Calls
• Video
MeeLngs
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

11. Capital
MaNers
www.capmaNers.com
• Follow
Up
• Sell
the
Value
• NegoLate
the
Deal
• LOI
• Define
the
Bargain
• Roadmap
for
Lawyers
• Path
Forward
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

12. Capital
MaNers
www.capmaNers.com
• Support
Due
Diligence
• RelaLonships
are
Key
• Prepare
for
the
AudiLon
• OrganizaLon
is
Key
• Professionalism
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

13. Capital
MaNers
www.capmaNers.com
• Manage
the
Lawyers
• Push
to
Close
“I’ve
Never
Closed
a
Deal
that
Didn’t
Fall
Apart
Five
Times”
Host:
John
Slater
john.slater@focusbankers.com
901-­‐684-­‐1274

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 Los Angeles, CA!
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Other Banker Locations!
 London, UK!
Seraphim Capital Ltd.!
Overview of FOCUS Investment Banking!
 Middle market investment bank since 1982"
 Specializing in transactions between $5 and $300 million "
 Serving entrepreneurial middle market companies"
 Delivering a balanced mix of sell side, buy side M&A and
corporate finance advisory services"
 Team includes 25 bankers, 32 senior advisors, three
research analysts, five support—total staff of 65"
 Offices—Washington DC (HQ), Atlanta, and Los Angeles"
 Securities transactions conducted by FOCUS Securities
LLC, an affiliated company, registered broker/dealer, and
member FINRA/SIPC"
For
More
InformaLon
Contact:
John
Slater,
Partner
and
Capital
Financing
Team
Leader
901-­‐684-­‐1274
John.slater@focusbankers.com
www.capmaNers.com
www.focusbankers.com