Mezzanine Loans in the United States
Access to institutional-grade mezzanine financing for acquisitions, expansion, and strategic growth.
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High funding limits beyond traditional loans
Preserve equity while amplifying capital base
Bullet repayment structure maximum cash for reinvestment during duration of loan
Ideal for high ROI use cases such as acquisitions and transformational initiatives
Top-caliber advisory from former M&A and leveraged finance professionals
Learn If Your Business is Suitable For A Mezzanine Loan Today!
Lending Parameters for Mezzanine Loans
Term Length & Structure
Typically 5 years
Bullet payment at end or back-loaded amortization
Eligibility
Mid-market businesses with $3M+ annual EBITDA
Established cash flow and proven operational track record
US or Canada based
Loan Amount
$6,000,000 – $50,000,000+, based on revenue, cash flow, and lender discretion
Parameter
Details / Typical Range
Underwriting Criteria
Amount and stability of EBITDA
Leverage ratios and debt service coverage
Management experience, particularly in handling leverage
Sponsor backing
Industry and regulatory trends
Overall business risk; lenders focus on ability to service debt from cash flow rather than collateral
Use of Funds
Working capital
Business expansion
Acquisitions
Recapitalization
Refinancing
Strategic investments
Security
Senior secured (will ascend to senior position in absence of traditional bank lender)
Subordinated or second lien debt
No personal guarantee
Interest Rates
Varies by lender and risk profile, but generally fixed rate
Cash interest between 10-13%
Plus paid-in-kind interest (PIK) of 1-4%
May warrants that participate in nominal amount of upside at time of exit
Covenants
Total leverage capped at 3.0-5.0x
Fixed charge coverage ratio (FCCR) of 1.1–1.4x,
Other customary restrictions
Principal / Amortization
No amortization or low amortization during Years 1-4
Bullet amortization in Year 5
Typical Providers
Private credit funds
SBIC funds
Family offices
Unitranche lenders
Time to Funding
4–8 weeks; longer for complex deals
Will require a Quality of Earnings (QoE) report
Process
Gather historical financial statements of borrower, including monthly income statement, balance sheet, and cash flow for last 3 years.
Forward projections for 3-5 years
Assemble business, financial, legal, regulatory, industry, customer, and supplier information into data room (large undertaking)
Conduct QoE
Negotiate terms of loan facility
Coordinate with attorneys, tax advisors, and others to close loan
What People Have Been Saying
Types of Mezzanine Financing Providers
Accrefi connects borrowers to a diverse range of mezzanine financing lenders, each offering tailored structures depending on growth strategy and capital requirements.
SBIC Funds
Small Business Investment Companies (SBICs), licensed and regulated by the SBA, are a major source of mezzanine financing for lower-middle-market companies. Because they use government-supported leverage, SBICs often provide competitively priced subordinated debt with well-defined underwriting standards. Compared to family offices, SBICs operate with more structured criteria and require formal diligence, but they generally offer more favorable pricing than traditional private credit funds. Their mandate makes them ideal for profitable, stable businesses with clear cash-flow visibility.
Private Credit Funds
Private credit funds will originate senior or subordinated debt (which includes mezzanine financing). These are typically large asset managers that invest their capital across a variety of asset classes, with credit being one of those categories. They are focused on delivering consistent, risk-adjusted returns to LP investors. As such, they have a more rigid underwriting box. In recent years, many private credit lenders have moved upstream in size and credit quality, preferring to lend senior debt to highest quality borrowers at lower rates.
Unitranche Lenders
Unitranche lenders combine senior and subordinated debt into a single blended facility, removing the need for separate senior and mezzanine tranches. While not traditional mezzanine providers, they are a direct alternative for borrowers seeking simplicity, speed, and higher total leverage in one instrument. Unitranche structures generally offer lower pricing than pure mezzanine loans but higher pricing than senior debt, making them a hybrid solution that competes with mezzanine capital in acquisition and recapitalization scenarios.
Family Offices
Family offices may provide mezzanine capital as one of their long-term investment strategies. However, family offices are notoriously opaque and can invest in virtually anything, in any style they want, free from typical LP constraints. To say one works at a family office simply means “we look for any opportunities in debt or credit, and when we find something we like, we invest in it”. The advantage is that the capital can be highly flexible and structured, often engineered to fit the most unique borrowing needs where other lenders will not go.
Benefits of Mezzanine Financing
Borrowers choose mezzanine debt financing because it strengthens the capital structure without sacrificing control. It provides flexible leverage that supports acquisitions, expansions, and major strategic initiatives.
Higher Funding Capacity
Mezzanine lenders extend leverage beyond conventional bank thresholds, enabling larger transactions, accelerated expansion, or transformative initiatives. For mid-market borrowers in the US, this additional layer often unlocks financing that banks alone cannot provide.
Equity-Like Patience
Mezzanine debt allows the borrower to defer all/most of the principal repayment until the final year it matures, charging only interest during the intervening period. For rapid growth companies, this affords an equity-like timeline because the precious cash flow can be recycled back into the business instead of allocated towards paydown.
Small Dilution
Instead of paying equity rates (+25%) in the private markets, mezzanine financing still allows owners to preserve their ownership by appending a small amount of dilution in the form of a warrant. These warrants amount to 1-5% of the upside, making mezzanine debt suitable for companies requiring capital without sacrificing control or excessive dilution.
Higher Flexibility
In addition to the patient nature of the capital, mezzanine financing options include PIK interest, and higher tolerances for leverage, allowing the borrower to have more operating latitude in running its operation. This flexibility allows companies to prioritize cash reinvestment when it is needed most.
Complements Senior Debt
Mezzanine debt financing serves as a supplemental layer between senior loans and equity, and is commonly subordinated to cheaper cost senior debt. This is an established business practice and governed through structured and highly-understood intercreditor and subordination agreements. In fact, many senior lenders have mezzanine providers they prefer to lend together with and vice versa.
Why Companies Choose Accrefi
Accrefi provides institutional-grade access to mezzanine financing through a disciplined, borrower-focused process. We streamline lender engagement, enhance data presentation, and help management teams evaluate structured capital alternatives with clarity.
Broad Access to Mezzanine Lenders
Accrefi works with a network of 500+ banks, private credit funds, and mezzanine finance providers across the U.S., Canada, and Western Europe. This reach enables borrowers to evaluate diverse capital structures and lender terms.
Client-First Approach
We have a borrower-first philosophy, and prioritize borrower outcomes. We help companies objectively compare term sheets, assess pricing structures, and identify mezzanine financing options that align with long-term strategic goals.
Full-Service Advisor
Accrefi is a full-service debt advisor. We do not sell leads, teach “master” courses, or provide a software for a DIY approach. We identify prospective mezzanine lenders, we create your fundraising materials, we pitch on your behalf, and we execute. That is our job and we are good at it!
Clarity and Transparency
Borrowers receive clear guidance on timeline, process, lender diligence requests, financial statements, projections, deal terms, legal documentation, and closing conditions. This ensures a crisp process when engaging with mezzanine financing lenders and walking towards a closing.
Get Started with Accrefi
Securing a mezzanine loan isn’t easy (which is why you are here). But we can make it straightforward: submit your business information, let our team assess your capital needs, and connect you with top mezzanine lenders. We negotiate the best terms and guide you through closing so your business can access funding quickly and efficiently.