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RECAPITALIZATION

Reshape your capital structure to support your next business or ownership objective.

Consider financing to rebalance debt and equity, address shareholder liquidity, or pursue strategic investments as your company’s priorities evolve.

DEALS WE SUPPORT

The Right Capital Structure Can Open the Next Opportunity

A company’s combination of debt and equity is usually set for the stage the business was in when it was put in place. As priorities change, that mix may no longer line up with what owners want to do next.

A recapitalization is an opportunity to reconsider financing obligations, capital availability and ownership-related requirements, without necessarily selling the entire business. Great Elm looks at the circumstances first, then discusses whether an asset-backed structure such as Unitranche or Junior Capital alongside an asset-based facility could fit.

Colleagues reviewing financial statements during a recapitalization discussion

COMMON FINANCING CHALLENGES

What Gets in the Way of a Better Structure

Several conditions tend to cause or complicate a recapitalization. These are the ones businesses most often run into.

FINANCING CONSIDERATIONS

What a Recapitalization Needs to Accomplish

Once the pressures are clear, the next step is working out what a workable structure has to do. These questions are usually answered before any financing is proposed.

Every transaction is different. Great Elm reviews the details of each opportunity before considering how financing could be arranged.

What We Look At

  • Objective: what the recapitalization is meant to accomplish and which obligations change.
  • Existing debt and equity: current debt and equity obligations, security agreements and lender consents.
  • Collateral and repayment capacity: the eligible assets available and the cash flow to support new financing.
  • Senior and subordinated financing: how the two could work together in the transaction.

RELEVANT FINANCING SOLUTIONS

Financing Options for Recapitalization

Two Great Elm solutions are most often considered for recapitalizations: Unitranche Loans, a single borrower-facing credit structure, and Junior Capital Loans, subordinated financing alongside an asset-based facility. Applicability is specific to each transaction.

FREQUENTLY ASKED QUESTIONS

Recapitalization Financing FAQs

Answers to common questions about recapitalizations and how asset-backed financing can relate to them.

New debt can be used to fund an ownership-related transaction, but it does not by itself determine who owns the business. The outcome depends on the transaction and its documents.

Discuss Your Recapitalization Financing Needs

Tell us about your company’s existing capital structure, the changes you are considering and your financing objectives. Great Elm can review the circumstances and potential asset-backed financing options.

Contact Our Financing Team

Tell us about your business and what you’re looking to finance. A member of our team will follow up to discuss your needs and potential next steps.