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4 Reasons Why Mezzanine Debt Is A Great Form Of Transitional Capital Post Covid19

4 Reasons Why Mezzanine Debt Is A Great Form Of Transitional Capital Post Covid19

Submitted by • May 25, 2020 www.attractcapital.com

Transitional capital is extremely important now as businesses recover from the Covid-19 crisis. Many companies have stretched their working capital and incurred losses as the first quarter ended and the crisis extended into the second quarter. When working capital is burned on funding losses, liquidity is compromised. The longer the loss-making period, the further the strain on working capital, until the point of illiquidity is reached. Eventually, working capital needs to be built back up to normal levels in order to resume revenue growth. As companies plan to restart, they need to raise adequate transitional capital to restock working capital and to absorb monthly losses until breakeven is achieved. Mezzanine debt lenders are ideal capital sources to fund your restart.

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