Senior Secured Loans
MFC Capital Funding’s main focus is providing
senior debt to sponsor-owned businesses and directly to privately
held businesses. MFC Capital funding provides senior debt
from $3 million to $25 million with a focus on facilities
sized from $5 million to $15 million. We syndicate our larger
transactions with a focus on keeping our hold level at or
below $15 million.
We have three core senior debt products:
1. Sponsor Backed Cash-Flow Multiple
Loans: We provide cash-flow multiple loans to our
strongest borrowers based on a multiple of free cash flow.
Cash-flow structures are typically provided in situations
where the borrower: (a) is owned by a funded private equity
sponsor; (b) has multiple “corporate finance”
alternatives to repay the loan in the event of default (e.g.
selling the company or one or more of its business units);
(c) competes in a mature or stable industry; (d) is a leader
in its markets; and (e) has a history of stable or growing
cash flows with no significant customer concentrations, among
other various considerations.
2. Structured Finance Loans (Asset-Based
Stretch): This product is used primarily by a borrower
that is unable to meet the cash-flow product profile, but
is still a very strong credit risk. In these circumstances,
the amount of credit provided in excess of the asset values
can approach up to 25% of the loan amount. The structured
finance over-advance (i.e. the amount in excess of standard
collateral advance rates) term loan typically amortizes in
one to three years.
3. Growth Asset-Based Loans:
We provide senior asset-based structures to growing borrowers
who have positive cash flow and full liquidation asset coverage.
This product has application over a very wide market. Assets
underlying the transaction include both current and long term
assets, with orderly liquidation values exceeding the advance
amount. In general, company specific dynamics do not support
the extension of credit beyond the value of the assets.
We finance a variety of companies including
manufacturers, distributors, and service businesses. We do
not finance turnarounds or provide DIP financing.
Overall, we pride ourselves on being responsive
and finding a way to get a deal done. When we can’t
find a way to get there, we will tell you quickly as well.
 Complementary
Subordinated Debt
LBO
Equity Fund Investments
Equity
Co-Investments
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