Guidebook to the Debt Markets

After years of an equity bull market, alternative financing options for companies continue to expand, creating opportunities for debt structures that didn’t exist just five years ago. This proliferation of specialized lending is compressing both lending terms and borrowing costs. While this compression in borrowing costs may be partially offset by gently rising interest rates over the next several years, creative terms and conditions for debt are giving CFOs new options for optimizing their capital structures.

Here at Capital Advisors Group, having advised more than 780 companies on their debt options over the past 12 years, we view this change through a unique lens. We see the evolution in the debt markets from the perspective of a library of more than 1,000 direct lending proposals from more than 65 lenders on behalf of our debt consulting clients. The recent expansion of lending options in the debt financing space has been transformational for companies seeking alternative financing for their capital structure. In managing these financings, we see first-hand the impact competition is having on structures and terms of loans. New players have been charging in to the market forcing traditional bank and independent debt funds to stretch their flexibility and expand the terms and dollars they are willing to underwrite.

Navigating the growing debt market of over 65 lenders is a daunting challenge that’s compounded by the private nature of many debt funds. To help shed light on the process, this month we wanted to offer our perspective with a white paper on the history and evolution of venture debt financing and the process borrowers should follow to help achieve favorable market terms.

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Best Regards,

Ben Campbell
President & CEO