Approach the Experts of Challis Capital for Private Equity Funds

Private equity refers to funds which are directly used for investment in private companies.

Categories of private equity

There many types of investments that come under private equity category. These include angel investing, leveraged buyout, venture capital and growth capital

Uses of Private Equity

  • These funds are mainly used in industries for the development of innovative products
  • It can generate large amount of money
  • These funds are extensively used for expanding the working capital
  • Private equity funds come handy for facilitating mergers and acquisitions
  • It helps in developing and making a company’s balance sheet stronger
  • It is best option for startup and small businesses to raise funds who are not able to get grants and loans.

If you are also looking for private equity funds then approach Challis Capital which has extensive experience and knowledge in raising funds from different channels. They are capable in funding capital even in complex funding situations. The company has wide network with leading industry players that allow them to directly access the capital for you.

Availing private equity in Australia

Today, in this fast paced market it becomes a necessity to hire the knowledgeable company expert who can help you in accessing the debt and equity capital directly. If you are also in similar situation then Challis Capital is your one-stop destination to accomplish your needs. They have good relationship with the professionals of leading private equity investment groups of Australia. As such, you can easily enhance your private equity funds through them.

Challis Capita has expertise in property related transactions. They are capable in offering optimal solution for any kind project with their strategic partnership with leading industry professionals. Challis Capital has earned reputation and credibility among clients for their expertise and best customer care.

 

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Mezzanine Debt – A Thing or Two

In this blog, we are discussing Mezzanine Debt in detail. Get to know what it is exactly and why it is preferred to finance anything from a property to a leveraged buyout, and everything in between.

Mezzanine Debt – An Insight

Mezzanine debt occurs when a hybrid debt issue (a type of debt with some features of equity) is subordinated to another debt issue from the same issuer.

Mezzanine debt comes with equity instruments attached – known as warrants – which enhances the value of the subordinated debt and allows greater flexibility while dealing with bondholders. It is greatly associated with acquisitions and buyouts, where it is used to prioritize new owners rather than the existing owners in the case of bankruptcy.

In other words, Mezzanine debt blurs the lines between everything that constitutes debt and equity. Although, this type of debt involves the highest-risk, it offers some of the highest returns (rate ranges between 12% – 20% per year).

A mezzanine lender is brought into a buyout in order to displace some part of the capital that is invested by an equity investor.

General Examples of Mezzanine Debt

Some examples of embedded options may include rights, stock call options, and warrants. Generally, mezzanine debt acts more like a stock than debt as the embedded options make the conversion of the debt into stock.

Let’s understand it by an example.

Let’s say, a private equity firm desires to buy a company worth $100 million with debt. But the senior lender only wants to invest 80 % of the value, and the private equity could not invest more than 10% of the remaining capital. In this case, the private lender would look out for a mezzanine investor to finance another $5 million, then, the firm only has to invest $5 million to meet up the $100 million.

The investor here used the mezzanine debt. That means, he will be able to convert the debt to equity when certain requirements are satisfied.

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A Thing or Two about Development Finance

Whether you are planning to buy a residential or commercial property, or carry part-built renovation, conversion or new build, then property development finance is what you should consider.

What exactly is development finance?

Development finance, also known as property, building, bridging and construction finance, refers to the short-term interest-bearing loans for a specific period, which is usually of three to four years. The main aim of the loan is to facilitate capital required during development of a property – land acquisition, professional fees, building works, marketing, finance itself or any contingencies involved in a development of a commercial or residential property.

What are the sources of acquiring such finance?

A lender can obtain property development mainly from two sources including commercial banks and alternative lenders. Acquiring property development from commercial banks requires a lot of paper work that sometimes become daunting to fulfill. In such cases, alternative lenders come into play.

Through alternative sources of finance like Challis Capital, finance can be obtained despite of bad credit history, and lack of some papers. You can contact the company to get to know the process better.

What are the terms and conditions involved in the process?

The main concern of any party lending money for the purpose of property development is to determine the repay ability of the borrower under the agreed terms and conditions. Thus, anyone who is looking for property development finance needs to produce a funding prospectus setting out the project’s financial requirements.

Then, the borrower needs to clarify the purpose of the property, whether it would be occupied by the owner, sold on or retrained as an investment. The value of the property at all stages of development is important as it becomes the security of the loan and could be repossessed by the lender if the borrower is declared defaulter.

These all terms and conditions are laid down in a lending agreement.

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Getting mezzanine debt from alternative lenders for your business

Mezzanine Finance is a middle layer of capital which comes between the equity and secured senior debt. This kind of finance is not secured by the assets and lending based on the ability of company to repay it through free cash flow.

Mezzanine debt offers several benefits like back-ended payments, greater amount of funding, longer terms and ability to retain control over the company. Providing flexibility to the borrowers is the key advantage of mezzanine debt. It offers attractive financing options for the mid-market and small scale companies that don’t have enough finance for investment and growth.

Where mezzanine debt can be used?

  • Capital financing for the improvement of working capital
  • To purchase assets or stocks of the business
  • Repayment of stretched liabilities or current dues
  • For recapitalization financing

If you are getting problems in procuring mezzanine finance then you can approach alternative lender like Challis Capital to get loan for your business with ease.

Why to choose Challis Capital?

Challis Capital has expertise in facilitating successful Mezzanine Debt for property developers and corporate clients. They have wide network of investment banks, financial institutions, private equity, lenders and superannuation funds which allow them to provide various flexible and competitive loans to businesses.

Challis Capital is reckoned as one of the foremost facilitators of Mezzanine Finance in Australia. They facilitate mezzanine debt for commercial properties for up to 85% of LVR. Apart from it, they also offer property development proposal which is up to 90% of TDC and up to 80% of GRV.

When it comes to Mezzanine Finance, Challis Capital is a trusted name with extensive experience and outstanding market knowledge to offer perfect solution to accomplish your requirements. If you need any help or want to know more about their services then you can directly call them. You can also approach them for confidential chat where they will assist you in every manner and help in funding your project.

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Understanding mezzanine finance and its benefits

Mezzanine financing, also known as subordinated debt, is a combination of debt and equity funding provided by a speciality lender. In other words, it’s a hybrid of debt and equity financing which is basically used by companies to facilitate their expansion costs.

This is a type of finance which requires little or no collateral and paperwork and tends to be for a short period of time. And it is wide used by small and mid-sized business owners as it integrates advantages of conventional borrowing with the flexibility of equity financing under a single functional arrangement.

Here are some benefits of mezzanine finance:

  • Mezzanine financing model ensures that the owner retains complete control of the company and its direction as well, resulting in little or no intervention from the lender.
  • This type of financing is acknowledged for its flexible arrangement, which allows customized solution to maintain the specific cash flow requirements of your business. You should approach an alternative lender to understand this mode of financing at length.
  • Mezzanine funding is considered suitable for companies that have gone beyond their start-up phase, and require capital to finance their business operations.
  • This mode of financing is always considered to be a lower cost alternative to raise equity or selling shares to an investor.
  • Alternative Mezzanine lenders have experience in developing strategies to maximize long-term value of such financing option. This helps in providing you with remarkable strategic assistance and excellent business insights.
  • Mezzanine funding ensures higher amounts of funding compared to a loan from a traditional bank or an asset- based loan. You, the businessman, is allowed to borrow three to four times its cash flow in a mezzanine deal.

In order to know what other benefits and advantages mezzanine finance offers, approach a trusted financial institution like Challis Capital that offer best alternative lending options to the businesses.

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Your Introductory Guide to Investing In Commercial Property

Commercial properties are one of the hottest investment options buzzing across the Australian real estate market. Investors who have come to the fore with an intention to invest in the Australian commercial property are captivated by higher returns and lower risk involved in it.

If you are also one of them, and want to make such investments to make the most of the hyped market, first understand a few things related to the commercial market including terms and conditions of commercial leases, GST implications, and others things. Your understanding of the matter would lead to a good and profitable decision.

In this article, we have included a couple of things that every investor should know about commercial properties before investing in them.

Types of commercial properties

When it comes to commercial property, one can invest in office, retail spaces or industrial properties. Approach a financial institute to get commercial property loan.

Higher Returns

Commercial property is greatly regarded for offering higher return. For instance, you are likely to reap up to 8% returns on an industrial property such as warehouse.

Risk involved

Investment in commercial property also involves risk that comes in the form of higher vacancy rates. For example, if you have invested in an office space, it may take a few months or a year to find a new tenant. And you have to bear losses until you find a tenant, this situation could be tough to get past.

Duration of leases

Commercial property leases are for a longer period of time. And it is unusual to have leases for an initial five-year period with the option to review for another five years.

Quality of tenant

It goes without saying that tenant is crucial for investment. Apart from private company owners or retail companies, you can lease your property to a government or large corporate, known as a ‘Blue chip’ tenant. Such tenants are likely to rent your property for quite a long period of time and unlikely to default on the rent. Therefore, renting out a space to such blue chip tenants would be a great way to make maximum profits possible.

Higher cost of entry

You need to have deep pockets in order to enter into the commercial property market. Rates of CBD office or retail space is largely based upon its location and facilities available around it. Further, depending upon the size, an industrial property on the outskirts of a city also proves to be expensive.

Outgoings payments

Being the owner of a commercial property, you need not worry about outgoings such as council rates, insurance, repairs and maintenance, as these would be paid by the tenant.

If you are willing to invest, you can seek commercial property loans from reputed financial institutes.

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An Exordium to Private Equity

This blog is intended to provide you brief information about what private equity is and how it can create value for your business. Along with this, you will be gaining insight into the methods behind private equity transactions, and how they are used to generate returns.

Let’s first understand what private equity is all about

In today’s thriving financial marketplace, Private Equity (PE) has stealthily gained a great amount of influence.

Well, the simplest way to define it would be as an equity that is not quoted on a public exchange. Actually, private equity comprises of individuals and firms that are interested in making investment in private firms or perform buyouts of public investment.

This is all done in order to achieve a positive return on investment. Most of the private equity industry includes large institutional funds such as pension funds, and large private equity firms that are basically funded by a group of accredited investors.

The main motive of the private equity investment is to gain a significant influence over the firm’s operations. In the case of private equity funds, accredited investors can only access private funds.

How equity investments create value

The most common investment strategies are leveraged buyouts and venture capital investments. Venture capital refers to taking equity investment in an organization in a growing industry. Further, under leveraged buyouts an organization is purchased by a private equity firm. The purchase is financed through debt collateralized by the target firm’s operations and assets.

By leveraging the investments private equity firms aim to amplify their potential return.

In a nutshell

The private equity industry is growing rapidly, facilitating a great way to fundraising. If you want to know more about this method of fundraising, approach reputed financial institutions like Challis Capital, which has a great network of high-net-worth private equity investors.

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