Private Credit | Debt Placement | Capital Structure
Private Credit Financing for Acquisitions, Refinancing and Growth
Private credit financing gives middle market companies, sponsors and acquisition vehicles access to institutional debt outside conventional syndicated bank markets. Facilities can be structured for acquisitions, refinancing, recapitalizations, growth investments, shareholder transactions and other defined corporate uses.
The important question is rarely whether private credit exists. The real underwriting question is what amount of debt the business can support, which layer of the capital structure should provide it and which lenders have the mandate to underwrite that particular risk.
Financely provides paid private credit placement
and debt advisory for qualifying companies and sponsors. Our work can include debt capacity analysis, capital structure design, lender packaging, institutional outreach, term sheet coordination and execution support.
Raising Private Debt
Financely works with eligible middle market companies, sponsors and acquisition vehicles seeking senior secured debt, unitranche, second lien, mezzanine and other private credit solutions.
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What Private Credit Financing Means
Private Credit Financing
Private credit is debt provided by nonbank institutional lenders such as private credit funds, specialty finance companies, alternative asset managers and other private capital providers. Facilities are privately negotiated and can be customized around the borrower, transaction and collateral.
A private credit lender for acquisition financing may underwrite a very different risk from a fund providing refinancing capital to a mature operating company. Lender selection therefore needs to reflect use of proceeds, leverage, company size, industry, collateral and repayment source.
Financely's private credit advisory for middle market companies
focuses on matching the proposed debt structure with the types of institutional lenders capable of underwriting it.
Common Private Credit Structures
Senior Debt
First Lien
Senior secured
Senior secured private credit with priority over agreed collateral.
Acquisition Debt
Unitranche
Single facility
A blended debt structure frequently used for acquisition financing.
Junior Debt
Second Lien
Additional leverage
Secured capital ranking behind the senior lien position.
Subordinated
Mezzanine
Flexible capital
Junior financing that can include cash interest, PIK and other return features.
Private Credit for Business Acquisitions
Acquisition financing is one of the clearest uses of private credit. A buyer needs committed capital at closing while the lender needs to underwrite the target business, purchase price, sponsor contribution and resulting leverage.
A private credit lender for acquisition financing can provide senior secured debt, unitranche financing or another negotiated structure. Larger transactions can combine senior debt with second lien or mezzanine capital.
Financely's LBO financing
coverage addresses acquisition structures where leverage forms a material part of the purchase price.
The lender normally evaluates historical EBITDA, free cash flow, purchase price multiple, customer concentration, management continuity, equity contribution and post-closing liquidity. The fact that an acquisition target is profitable does not automatically establish the amount of debt that can be raised.
Private Debt Refinancing for Middle Market Companies
Private credit can also refinance bank facilities, maturing private debt, bridge loans or other existing obligations.
A private debt refinancing for a middle market company begins with current debt, maturity dates, cash flow and the reason the existing facility needs to be replaced.
A company may need refinancing because a bank is reducing exposure, a covenant has become restrictive, an acquisition changed the credit profile or the business requires additional capital that the incumbent lender cannot provide.
Financely can incorporate refinancing into a wider debt placement and capital raising advisory
mandate when a new lender or capital structure is required.
Debt Capacity Analysis for a Private Credit Raise
Debt capacity analysis determines how much borrowing can be supported by the company's earnings, free cash flow, liquidity, assets and existing capital structure.
A borrower asking for US$30 million does not necessarily have US$30 million of underwritable debt capacity.
The lender may calculate normalized EBITDA, apply a leverage threshold and then test the resulting debt against interest coverage, fixed charges and downside performance.
If the leverage test supports US$30 million but cash flow supports only US$24 million, the lower number can become the binding constraint.
How a Capital Structure Can Be Built
First Lien
Senior secured debt normally occupies the lowest risk debt position and benefits from first priority over agreed collateral.
Second Lien
Junior secured debt can increase leverage while ranking behind the first lien lender.
Mezzanine
Subordinated capital can fill a funding gap where senior debt alone does not provide sufficient proceeds.
Preferred Equity
Preferred capital can sit between contractual debt and common equity depending on the transaction.
Common Equity
Sponsor or shareholder capital absorbs the most subordinated economic risk.
Unitranche Financing
Unitranche financing can be attractive when a borrower wants one debt facility rather than separate senior and mezzanine loans.
The facility can combine different economic risk layers behind one borrower-facing structure. For acquisition transactions, this can reduce documentation complexity and provide greater certainty around the total debt amount.
Financely also maintains dedicated acquisition coverage for senior debt, mezzanine and unitranche financing for buyers and sponsors.
When Second Lien and Mezzanine Debt Are Used
A senior lender may be willing to finance only part of the required capital. Junior debt can occupy part of the remaining gap.
Second lien financing retains a security interest but accepts junior priority. Mezzanine financing can be unsecured or structurally subordinated and may include PIK interest.
Financely's mezzanine financing
coverage addresses these higher leverage situations.
What Private Credit Lenders Need
Historical Financials
Lenders need reliable evidence of revenue, earnings, cash flow and financial performance.
Current Management Accounts
Recent performance helps lenders identify changes not reflected in annual accounts.
Debt Schedule
Existing lenders, balances, maturities, collateral and payment obligations must be understood.
Financial Model
Forecasts should show cash flow, leverage, debt service and liquidity after financing.
Use of Proceeds
Acquisition, refinancing, capex and growth requirements should be clearly documented.
Transactions requiring institutional organization can also use Financely's private credit data room buildout
service.
Hiring a Private Credit Placement Agent
A private credit placement agent for a middle market company should do more than distribute a financing request to lender lists.
Institutional debt placement requires underwriting the request, selecting the relevant financing strategy and presenting the credit to lenders whose mandate actually matches the transaction.
Financely provides paid advisory and placement work. The scope can include transaction screening, credit analysis, financing strategy, lender package preparation, outreach and execution support.
Request a Private Credit Proposal
Submit the financing amount, use of proceeds, historical financials, existing debt and target closing date. Financely will assess the mandate and issue a quote for eligible transactions.
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Frequently Asked Questions
Can private credit finance a business acquisition
Yes. Private credit funds can provide senior secured, unitranche, second lien and other acquisition debt depending on target cash flow, leverage and sponsor equity.
Can private credit refinance existing bank debt
Yes. A private lender can refinance existing facilities when the borrower satisfies underwriting and the new structure provides a credible repayment route.
What is a private credit placement agent
A placement advisor helps structure, prepare and present a financing transaction to suitable institutional private credit providers.
How much private debt can a company raise
Facility size depends on earnings, leverage, cash flow, collateral, liquidity, existing debt and lender risk appetite.
Does Financely guarantee private credit funding
No. Financely provides advisory and placement services on a best efforts basis. Every lender completes independent underwriting and credit approval.
Important. This material is for general information only and does not constitute legal, tax, investment, regulatory or credit advice. Financely provides corporate finance advisory and arranging services. Financely is not a bank or direct lender and does not guarantee financing approval, pricing, terms, timing or completion. All financing remains subject to KYC, KYT, AML and sanctions screening, due diligence, documentation and final institutional approval.
