Debt financing includes bridge financing, short-term, medium-term
and long-term debt instruments.
Bridge financing
Bridge financing is often very short-term. Key characteristics
include:
| • |
The financing is secured
by tangible and/or intangible assets;
|
| • |
There exists a clear “take-out“,
at maturity, confirmable and known at the start; |
| • |
The term of the bridge financing is
often in the range of two to six months.
|
Short-term debt
Short-term debt (often maturing within 12 months) includes
bank lines of credit and/or accounts receivable financing
facilities.
Augmenting these working capital sources, Champlain can
often assist the company in obtaining purchase order and/or
contract financing as a pre-cursor to the receivable /
inventory credit facilities.
Medium-term financing
Medium-term financing may range from two to five years.
These term loans are often secured by tangible fixed
assets, such as equipment and other capital assets, and
may also
include identified intangible assets (such as proprietary
software and other intellectual property).
The instruments could include not only term loans, but
also lease financing, as well as creative sale-leaseback
facilities.
Long-term financing
Long-term financing instruments, evidenced by senior
debt instruments and/or real estate mortgages, are
often secured
by stated capital assets, including property, plant
and equipment.
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