Capital Primer

Theme

"The most traditional form of business capital."

Overview

A company that wishes to enhance its purchasing power takes on debt to boost the effectiveness of its capital structure.

Definitions

Senior debt takes primary security against the assets of the borrower, typically has fixed terms of repayment, and charges fixed or floating interest rates. As a general rule, senior debt lenders are relatively risk averse (in the case of bankruptcy, senior lenders are repaid first). There are two broad categories of senior debt: asset-based and cash flow-based loans.

Business Lifecycle Stage

Typically, only established, positively cash flowing companies are able to raise senior debt as the lender will require the underlying business to be able to pay for the debt service (principal plus interest) out of its historical (not projected) cash flow.

When Appropriate:

Large, non-recurring capital expenditures.
Financing of a project, company or product line acquisition.

How Westham Capital Partners Can Help

Westham Capital Partners, based in Richmond, VA, serves as a co-investor and strategic partner to private investment groups (Partner Funds) who desire concentrated investment opportunity development throughout most of the United States and Canada. These funds retain Westham to provide them with a dedicated, more efficient business development effort targeted towards intermediaries, business brokers, attorneys, accountants and other persons of influence. Westham and its Partner Funds share an interest in buyout, MBO, recap, growth capital, subordinated debt, senior debt and distressed investment opportunities.

Next Step

For additional information about our interests in this and other investment areas—or to discuss your capital needs—please Contact WCP or call 804.282.0785. We welcome you to invite your counsel or other advisors to participate as well.

Senior Debt Partnership