Over the past 35 years HIP has lead or participated in numerous financial structures. Historically we have invested primarily in equity in addition to structured debt. Since or primary experience has been in providing equity it has helped us in structuring debt. Our analysis focuses on enterprise value versus a traditional bank providing debt and requiring collateral. This more closely aligns our interests with those of the management. The companies that have attractive growth potential this is less expensive than raising equity as it allows the company to increase value over the term of our loan and raise equity in the future at a higher valuation. Our typical structure has these characteristics:

  • Security: collateralized by assets not pledged to the senior lender and the company’s shares
  • Size: $2-$5 million
  • Term: 3 years’ interest only
  • Interest rate: 15% paid monthly in arrears
  • Equity kicker: TDB