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Unitranche Financing: Can it Help your Business?

Unitranche represents a flexible type of financing. Small and mid-sized companies generally use this financial tool to help them fund their ownership transitions or certain acquisitions. Unitranche combines different types of secured and unsecured debt into one single loan. Unitranche also comes with a blended interest rate- equal monthly payments of principal plus interest blended over the agreed period. Thanks to this compound interest rate and a predictable repayment schedule, the business can enjoy more freedom and flexibility (as compared to having to meet several repayment terms and different interest rates with multiple outstanding debts). For more custom-tailored information on the unitranche financing, contact a unitranche ct attorney today.

Typically, when we discuss acquisition financing, we talk about several loans that come from different lenders. Each loan has a repayment schedule, a different interest rate, and different terms and conditions. Every loan will operate separately, with its security and agreement. Thanks to unitranche financing, all these complex loan structures become simplified and unified under the same umbrella. All the loans are blended into one form of loan that a single lender offers. Talk to a unitranche ct attorney to determine if such a financing solution would suit your business profile.

So what are the benefits of unitranche financing?

  • Firstly, these loans are predictable- meaning that you can ensure closing with greater ease since we are talking about one single loan agreement. Unitranche financing is specifically beneficial in case of an acquisition when the exclusivity periods also come with some very tight timelines.
  • Flexible repayment terms- the repayment schedule of a unitranche financing tool can be easily adapted to your unique business profile (taking into account your cash flow, for example).
  • Cheaper- it is much cheaper to have only one outstanding debt than multiple ones on different terms and interest rates.

Even though unitranche financing may not be the best option for every company (many like to diversify funding!), it is worth considering this option.

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