Mezzanine Debt
Contractual subordinated debt positioned between senior financing and sponsor equity within the capital structure.
Junior Capital Advisory & Placement
Junior Capital and Subordinated Debt Placement
Financely structures and places junior capital for companies, sponsors and acquirers that need financing beneath senior debt and above common equity.
We evaluate the complete capital stack, determine how much subordinate capital the transaction can support, prepare the investment case and coordinate placement across private-credit, mezzanine and specialty-capital providers. These are paid professional advisory services delivered under a formal engagement mandate.
Position
Below Senior Debt
Capital sits beneath first-lien or senior secured financing.
Purpose
Finance the Capital Gap
Increase transaction funding without relying solely on equity.
Providers
Private & Specialty Capital
Placement across suitable institutional capital sources.
Engagement
Paid Advisory Mandate
Underwriting, structuring and placement are remunerated services.
Capital Stack Structuring
Senior Debt Often Leaves a Funding Gap
Junior capital can bridge the remaining requirement where a transaction has sufficient enterprise value and cash-flow capacity to support additional leverage. The structure must account for senior lender restrictions, intercreditor terms, repayment priority and the company's ability to service the complete debt stack.
Junior Capital Structures
Capital Structures We Can Evaluate and Place
The appropriate instrument depends on the company's leverage, senior facility, enterprise value, cash flow, transaction purpose and required level of structural flexibility.
Second-Lien Debt
Junior secured capital benefiting from a subordinated security position behind the senior lender.
Subordinated Term Loan
Junior debt with contractual payment and priority terms subordinated to designated senior obligations.
Holdco Debt
Financing raised at a holding-company level where structural subordination fits the transaction and cash-flow architecture.
Junior Unitranche Participation
Junior economics embedded within a broader unitranche or coordinated direct-lending structure.
Structured Preferred Capital
Preferred or hybrid capital where the transaction requires more flexibility than conventional subordinated debt.
Transaction Uses
Where Junior Capital Fits
Business Acquisitions
Fill the gap between senior acquisition debt, sponsor equity and the purchase price.
Expansion Capital
Finance acquisitions, capacity expansion or strategic growth beyond senior lender availability.
Shareholder Liquidity
Support eligible recapitalizations, partner buyouts and balance-sheet transactions.
Debt Refinance
Rebuild the debt stack when existing maturities or capital requirements require a new junior layer.
Independent Sponsor Deals
Supplement sponsor equity and senior debt for qualifying acquisition transactions.
Strategic Acquisitions
Finance bolt-ons and strategic transactions while preserving corporate liquidity.
Capital Stack Gap
Close a defined financing gap where senior proceeds cover only part of the transaction.
Bespoke Transactions
Design junior structures around unique collateral, ownership or repayment requirements.
Capital Stack
Position Junior Capital Within the Complete Financing Structure
Junior financing has to work alongside the senior lender and equity sponsor. We model the entire stack so leverage, priority, cash interest, amortization and exit requirements remain coherent at closing.
Layer 01
Senior Debt
First-priority bank, private-credit or asset-backed financing.
Layer 02
Junior Capital
Mezzanine, second-lien, holdco or subordinated debt.
Layer 03
Preferred / Hybrid Capital
Structured capital where additional flexibility is required.
Layer 04
Common Equity
Sponsor or shareholder capital carrying residual enterprise risk.
Underwriting
What Junior Capital Providers Will Evaluate
Junior lenders accept a subordinate position in exchange for higher economics and a carefully defined risk profile. The transaction therefore requires a clear enterprise-value, leverage and repayment case.
EBITDA & Free Cash Flow
Sustainable earnings and cash generation available to service the complete debt stack.
Total Debt Capacity
Senior leverage, junior leverage and total debt relative to earnings and enterprise value.
Senior Lender Terms
Existing covenants, permitted debt, security and intercreditor requirements.
Equity Cushion
Value remaining beneath the junior lender within the total capitalization.
Use of Proceeds
Acquisition, growth, refinancing, recapitalization or another defined corporate transaction.
Repayment & Refinancing Path
Scheduled amortization, cash-flow repayment, refinancing or transaction exit supporting ultimate repayment.
Placement Process
From Capital Gap to Executable Junior Financing
Review financials, transaction and existing senior debt.
Calculate junior debt capacity and complete capital stack.
Define instrument, priority, economics and repayment terms.
Approach suitable private-credit and junior-capital providers.
Coordinate term sheets, diligence and financing documentation.
Paid Advisory Services
Junior Capital Placement Is a Paid Advisory Mandate
Financely provides professional underwriting, capital-stack design, transaction modeling, credit packaging, capital-source selection, placement and financing negotiation. Engagement begins after execution of the applicable advisory mandate and payment of the agreed structuring retainer.
Capital Stack Analysis
Determine the appropriate amount and position of junior capital.
Debt Capacity Modeling
Model senior leverage, junior leverage and total debt service.
Structure Design
Define security, subordination, maturity, amortization and economics.
Credit Memorandum & Lender Package
Present the transaction in a format suitable for institutional underwriting.
Capital Placement
Coordinate outreach across selected private-credit and junior-capital sources.
Term Sheet & Closing Support
Compare proposals and coordinate financing workstreams through closing.
Commercial Terms
Advisory Fees Are Quoted by Transaction
The advisory fee reflects transaction size, complexity, capital requirement, existing senior debt, placement scope and expected execution work. Financely issues a formal engagement letter setting out the retainer and applicable closing economics before work begins.
Paid Structuring Retainer
Payable upon engagement to activate underwriting, structuring and placement work.
Success Economics
Applicable transaction-based compensation is documented in the engagement agreement.
Transaction Specific
Pricing reflects the amount of capital required and the work necessary to structure and execute the placement.
Frequently Asked Questions
Junior Capital & Subordinated Debt
What is junior capital?
Junior capital is financing positioned beneath senior debt
within a company's capital structure. It can include
mezzanine debt, second-lien loans, subordinated debt, holdco
debt and certain preferred or hybrid structures.
When does subordinated debt make sense?
Subordinated debt can be useful when senior financing covers
only part of an acquisition, refinancing, recapitalization or
growth requirement and the company has sufficient cash flow
and enterprise value to support another layer of capital.
Can junior capital reduce the equity requirement?
In qualifying transactions, junior capital can fill part of
the capital requirement between senior debt and equity. The
achievable amount depends on leverage capacity, lender
appetite and the underlying transaction.
Can you place junior debt for an acquisition?
Yes. Acquisition financing is a common use case for junior
capital, particularly where senior acquisition debt and
sponsor equity leave a defined funding gap.
Can you work alongside an existing senior lender?
Yes. The junior structure can be developed around an existing
or proposed senior facility, subject to lender permissions,
intercreditor requirements and the complete capital structure.
Does Financely charge an upfront advisory fee?
Yes. Junior capital structuring and placement are paid
advisory services. Financely works under a formal mandate with
an upfront structuring retainer and any applicable closing
economics set out in the engagement agreement.
Does Financely provide the junior capital directly?
Financely provides structuring and capital-placement advisory.
Capital is supplied by third-party private-credit funds,
specialty lenders and other suitable financing institutions
following their independent underwriting and approval.
What should we submit to request a quote?
Provide the financing amount, use of proceeds, company
financials, EBITDA, current debt, senior facility terms,
transaction structure, existing equity contribution and
expected closing timeline.
Need Junior Capital Beneath Your Senior Facility?
Submit the required capital amount, company financials, EBITDA, transaction purpose, existing or proposed senior debt, current leverage, equity contribution and target closing date. Financely can quote a paid advisory mandate covering junior-capital structuring and placement.
This is a paid professional advisory service. Engagement begins after execution of the mandate and payment of the applicable structuring retainer. Request a Junior Capital QuoteFinancely provides paid corporate-finance advisory, junior-capital structuring and capital-source coordination on a best-efforts basis. Engagement requires execution of the applicable advisory agreement and payment of the agreed retainer. Capital is provided by third-party financing institutions following their own underwriting and approval. Financely does not guarantee financing, pricing, terms or transaction completion. Junior financing may require senior-lender consent, intercreditor documentation, security arrangements and other legal documentation. Where regulated placement, distribution or securities activity is required, appropriately authorized parties must be involved.
Download the Structured Trade & Commodity Finance Guide
Understand how physical trade can be financed across the full transaction cycle, from supplier payment and pre-shipment funding through inventory, borrowing bases, documentary credit, receivables and final repayment. The guide outlines the core structures lenders evaluate, the documentation required and how transactions are prepared for financing.