Cerebro revolutionizes commercial lending with data-driven processes that help middle market companies access growth capital financing options.
Growth Capital for Middle Market Companies Seeking to Grow, Expand or Acquire
High growth companies or companies looking to expand into new markets are ideal candidates for growth capital financing. Loan amounts up to $100 million for sponsored & non-sponsored companies.
Secure Better Rates & Terms for Growth Capital
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*These rates are averages, calculated from current and past Cerebro Capital clients.
How Can Growth Capital Support Your Business?
Every company wants to grow and expand in order to increase profits. Smart companies know that they can leverage the right type of capital to fund their growth. Knowing what loan options are available and securing the right debt structures can mean the difference between stagnation and success.
Expand Into New Products & Markets
Generally, successful businesses are expected to be success expanding into new markets or launching new products. However, lenders will favor loan requests that include "hard costs" as the majority of expenses. Examples of hard costs include investments in inventory and equipment. In contrast, soft costs are considered less certain to generate profits, such as hiring new sales and marketing staff.
For an expansion-oriented company, obtaining the capital required for an acquisition can be a fast way to immediately expand into new markets. Often high growth companies can leverage the cash flows of the existing business and the target business to receive debt to not only fund the transaction but receive excess capital for growth.
Purchase Inventory, Equipment or Other Assets
Asset-based financing for growth is even easier to secure than cash flow loans. It's a more straightforward process to underwrite tangible assets than it is to predict the future cash flows of a business. Many asset-based lenders can fund within 45 days if not sooner. Growth capital in the form of ABL financing can offer attractive terms and flexibility to grow.
Growth capital is an ideal financing vehicle for middle market companies in need of additional capital, while maximizing total leverage with little equity dilution.
Has your company grown significantly over the last 24 months?
Do you have a financial model projecting double-digit growth?
Are you looking to expand your business or acquire a new business?
Has your company been operating for 3 or more years?
If you answered yes to any of these questions, growth capital could be a great option for your organization. Find out how we can help you get started.
What Rates & Terms to Expect for Growth Capital
Curious about the current rates and terms to expect for growth capital? There is a wide variety of loan structures and lender types depending on your company profile and preferences. Below offers average terms across different lenders.
Cash Flow Loan from a Commercial Bank: Used for asset-heavy companies, sponsor-backed companies, or those willing to provide personal and corporate guarantees. Leverage multiples between 1.25 and 3. Terms between 5 and 7 years. Rates in the low to mid single digits. More strict loan covenants tied to liquidity and debt service.
Cash Flow Loan from Non-Bank: Used for asset-light companies, sponsored or non-sponsored companies, and those wanting to avoid recourse. Loan sizes typically above $5 million. Leverage multiples as high as 4.5x. Terms usually 5 years with longer amortization periods and options for interest only periods. Rates in the upper single digits to mid double digits. Potential for warrants or equity sweeteners. Usually more flexible covenants or cov-light.
Asset-Based Loan: Collateralized by accounts receivables (AR Financing), Purchase Orders (PO financing), equipment, or inventory. Revolver structure with advance rates ranging from 60-90% depending on type of asset. Loan sizes above $500,000.
SBA 7a Loan: Loans sizes below $5 million. Companies and owners must meet SBA requirements. Loan term is 10 years with interests rates in mid single digits. Personal guarantees are required.
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