FINANCING SOLUTIONS
MCA provides flexible, private investment solutions tailored to meet the needs of lower, middle market businesses, whose access to traditional bank financing is limited or unavailable. Our investment solutions include term debt, equity and factoring.
Debt
MCA offers flexible term debt solutions to lower, middle market operating businesses through our dedicated private debt funds. Our current investment activities are being conducted out of Montgomery Capital Partners V, LP, which is in its last year of the investment period. Montgomery Capital Partners I, LP is fully liquidated, and Montgomery Capital Partners II, LP is in the process of resolving its final investment to complete the fund's lifecycle. Montgomery Capital Partners III, LP and Montgomery Capital Partners IV, LP are no longer making investments and are in the process of returning capital to investors.
Typical loan sizes range from $1,000,000 to $5,000,000, with a 3-year term and 5-year amortization. MCA generally takes a first lien, secured position in a company's assets but selectively considers subordinated debt opportunities. Additionally, in most term loans, MCA separately purchases a warrant for equity ownership that can be repurchased by the borrower upon loan repayment. MCA takes an active role in working with company management on operations, strategy, and execution.
Equity
MCA makes select, direct equity investments, along with our investment partners, in lower, middle market operating entities. Investment is typically $500,000 - $5,000,000 and structured as a preferred equity interest with flexible terms designed to meet both company and investor requirements. In most cases, MCA takes a controlling interest but terms often allow for owner-operators to "claw-back" majority ownership based on company performance and investor return metrics. MCA takes an active role in working with and supporting all of our portfolio companies at both the Management and Board levels.
Factoring
MCA provides accounts receivable and purchase order financing through MCA Financial Solutions, LLC. Our primary focus is on high-dollar, low-volume invoice and PO transactions where the required financing need is $250,000 to $1,000,000. Terms are standard for factor financing but MCA Financial Solutions has the flexibility to consider non-standard factor transactions and unique deal structures for businesses that may not fit into a traditional factoring solution.
Special Opportunities
MCA can lead or participate in select, one-off financing transactions where unique and flexible deal structures are needed. Financing vehicle can be debt, equity or a combination of both, with direct investment up to $1.5 million and in participations up to $10 million.
