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About the Unitranche Financing Scheme for Businesses

Unitranche is a type of flexible financing tool, mainly used by small to mid-sized companies. Owners use these types of loans in order to help fund ownership transitions or acquisitions. Unitranche is also a type of mixed loan, including a secured and unsecured debt platform that comes with a mixed interest rate. However, the repayment schedule of such a loan is predictable and transparent, which offers businesses the flexibility they need. If you would like to find out more about these loans, a cash flow loan ct attorney can definitely help explain everything from a legal standpoint.

There are several advantages of such unitranche financing schemes- an expert cash flow loan ct attorney explains:

  • A loan scheme with closure efficiency– When you negotiate the terms and conditions of a loan with one single lender, it automatically becomes much easier to ensure the closure of the loan. On the other hand, when you need to create separate sheets of terms & conditions with several lenders, closure efficiency is not as predictable and as well put together.
  • Highly flexible repayment terms– unitranche as a loan scheme comes with a basic, simple structure and also with flexible repayment terms. The negotiations with your lender are much simplified because there is only one single financial structure to put into the plan. Also, you will work together with the lender to create a repayment schedule that is adapted to the main cash flow profile of your business. Each business has different needs, so custom tailoring the loan to your specific needs is a great advantage.
  • Minimized costs– instead of having to pay for several interest rates for loans from different lenders, with a unitranche loan there will be one debt instrument you have to look at. This automatically means overall reduced loan costs.

However, before venturing into opting for unitranche financing as a solution, business owners should highly consider the general impact such a loan will have on the overall capital structure of the business. Quite often, companies can do better on a financial level if they diversify their funding resources and use multiple lenders, rather than having everything under the same umbrella.

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