Capital Development Services

When you traditionally think of capital development you think about selling a piece of your company for capital to be used to expand and grow your business. We have access to funding sources that a typical local/regional bank may not. We are able to work with private equity groups, hedge funds and family offices to provide a comprehensive solution to your capital needs. The types of Capital Development Services that SouthStar Capital focuses on are:

Subordinated Mezzanine Financing

Mezzanine financing assists companies that are in need of additional capital and their primary financing company, whether it is a bank or a traditional lender, will not provide them additional working capital. Groups that specialize in mezzanine financing will often take a second lien (subordinated) position to a bank. This type of financing typically focuses on cash flow of the company and is more suited for companies that have been in business 3 or more years, are profitable and need additional capital to grow their business. The mezzanine financing companies are focused on cash flow to ensure you are able to cover the extra debt expense. Some groups will also request warrants which could allow them to take a minority equity position at a predetermined point in the future.

Purchase Order and Accounts Receivable Financing

Purchase Order and Accounts Receivable Financing when paired together are ideal for a startup company that has the potential to generate a large amount of purchase orders in a short period of time. This allows the entrepreneur to retain equity and finance the purchase order with debt. SouthStar Capital will advance the required funds to make the product and deliver it to your customer. At that point SouthStar will increase the advance amount based on the face value of the purchase order/invoice, allowing you to have access to working capital. Typically, after a few rounds of Purchase Order and Accounts Receivable financing the company will be able to fund its own purchase orders thereby reducing the overall cost of financing while still maintaining an Accounts Receivable financing relationship.

Equity Raise

Typically giving up equity is the last thing an entrepreneur wants to do but if you would like to pursue this option we are able to assist. This is ideal for companies that are seeking a partner who will be active in the business and has contacts that the entrepreneur does not possess. An Equity partner will bring experience, management and growth capital. When undergoing an equity raise, a typical partner is a Venture Capital Firm or Private Equity Firm that specializes in that market sector.

Contact SouthStar Capital today to discuss raising equity and/or debt for your start up or seasoned business.