{"id":2864,"date":"2020-03-23T17:57:48","date_gmt":"2020-03-23T17:57:48","guid":{"rendered":"http:\/\/localhost\/2020\/swoopMW20\/?post_type=knowledge-hub&#038;p=2864"},"modified":"2022-10-28T13:56:35","modified_gmt":"2022-10-28T13:56:35","slug":"private-debt","status":"publish","type":"knowledge-hub","link":"https:\/\/swoopfunding.com\/za\/knowledge-hub\/private-debt\/","title":{"rendered":"Private debt"},"content":{"rendered":"\n <div class=\"faq-accordion faq-accordion194\">\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading0194\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse0194\" aria-expanded=\"true\" aria-controls=\"collapse0\">\n What is private debt? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse0194\" class=\"collapse show\" aria-labelledby=\"heading0\" data-parent=\".faq-accordion194\">\n <div class=\"card-body\">\n <p>Private debt is an umbrella term that refers to debt products that are financed by non-bank institutions. Unlike publicly listed corporate bonds,\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/private-debt\/\">private debt<\/a>\u00a0products are usually illiquid and not issued or traded on public markets. Private debt (also known as private credit) includes\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/direct-lending\/\">direct lending<\/a>,\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/mezzanine-finance\/\">mezzanine finance<\/a>\u00a0and\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/special-situations\/\">special situations<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading1194\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse1194\" aria-expanded=\"true\" aria-controls=\"collapse1\">\n Why choose private debt? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse1194\" class=\"collapse \" aria-labelledby=\"heading1\" data-parent=\".faq-accordion194\">\n <div class=\"card-body\">\n <p>If you\u2019re an established business looking for growth finance or a buyout you might want to consider either\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/direct-lending\/\">direct lending<\/a>\u00a0or mezzanine finance (a hybrid of debt and equity).<br data-rich-text-line-break=\"true\" \/>\u00a0<br data-rich-text-line-break=\"true\" \/>You could consider\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/private-debt\/\">private debt<\/a>\u00a0if you are looking to raise working capital for business growth (see growth finance), infrastructure, real estate development or a buyout.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading2194\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse2194\" aria-expanded=\"true\" aria-controls=\"collapse2\">\n Pros and cons of private debt? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse2194\" class=\"collapse \" aria-labelledby=\"heading2\" data-parent=\".faq-accordion194\">\n <div class=\"card-body\">\n <ul>\n<li><strong>Retain equity &#8211; retain control<\/strong>. Once you repay the principal and interest accrued, you keep same amount of equity. Unless it is a financed through\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/convertible-loan-note-cln\/\">Convertible Loan Notes<\/a>\u00a0(CLNs), which are debt instruments that can convert into shares in the future.<br data-rich-text-line-break=\"true\" \/><\/li>\n<li><strong>Available to lower credit history<\/strong> &#8211; although the interest charged may be higher.<br data-rich-text-line-break=\"true\" \/><\/li>\n<li><strong>Currently unregulated<\/strong> &#8211; exposes you to higher risks, lender and borrower alike.<\/li>\n<\/ul>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading3194\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse3194\" aria-expanded=\"true\" aria-controls=\"collapse3\">\n Have you also considered? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse3194\" class=\"collapse \" aria-labelledby=\"heading3\" data-parent=\".faq-accordion194\">\n <div class=\"card-body\">\n <p><a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/mezzanine-finance\/\"><strong data-rich-text-format-boundary=\"true\">Mezzanine finance<\/strong><\/a><strong data-rich-text-format-boundary=\"true\">\u00a0<\/strong><br data-rich-text-line-break=\"true\" \/>\u00a0<br data-rich-text-line-break=\"true\" \/>Mezzanine finance is effectively a\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/business-loans\/\">business loan<\/a>\u00a0with a twist. Arrangements can differ but in most cases if you can\u2019t pay back the debt within a pre-agreed timeframe then the debt becomes equity. In other words, the lender gets a share of equity in your business if you default on your loan \u2013 you\u2019re using equity as your security. Mezzanine finance is often subordinated to bank debt.<br data-rich-text-line-break=\"true\" \/>\u00a0<br data-rich-text-line-break=\"true\" \/><a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/special-situations\/\"><strong>Special situations<\/strong><\/a><br data-rich-text-line-break=\"true\" \/>\u00a0<br data-rich-text-line-break=\"true\" \/>In a \u2018special situation\u2019, i.e. if your business is going through a significant change (or you are facing bankruptcy) you may welcome an approach from a\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/special-situations\/\">special situations<\/a>\u00a0fund.<br data-rich-text-line-break=\"true\" \/>Special situations funds come under the banner of\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/private-debt\/\">private debt<\/a>\u00a0funds \u2013 your investors (e.g. hedge funds, private equity companies and other intuitional investors) will usually take a controlling stake in your business.<br data-rich-text-line-break=\"true\" \/>\u00a0<br data-rich-text-line-break=\"true\" \/><a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/direct-lending\/\"><strong>Direct lending<\/strong><\/a><strong>\u00a0<\/strong><br data-rich-text-line-break=\"true\" \/>\u00a0<br data-rich-text-line-break=\"true\" \/>Direct lending comes under the umbrella of\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/private-debt\/\">private debt<\/a>\u00a0(also known as private credit), which includes\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/mezzanine-finance\/\">mezzanine finance<\/a>\u00a0and\u00a0<a href=\"https:\/\/swoopfunding.com\/za\/knowledge-hub\/special-situations\/\">special situations<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n \n <script type=\"application\/ld+json\">\n    {\n        \"@context\": \"https:\/\/schema.org\",\n        \"@type\": \"FAQPage\",\n        \"mainEntity\": [\n                                {\n                \"@type\": \"Question\",\n                \"name\": \"What is private debt?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Private debt is an umbrella term that refers to debt products that are financed by non-bank institutions. Unlike publicly listed corporate bonds,\u00a0private debt\u00a0products are usually illiquid and not issued or traded on public markets. Private debt (also known as private credit) includes\u00a0direct lending,\u00a0mezzanine finance\u00a0and\u00a0special situations.\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Why choose private debt?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"If you\u2019re an established business looking for growth finance or a buyout you might want to consider either\u00a0direct lending\u00a0or mezzanine finance (a hybrid of debt and equity).\u00a0You could consider\u00a0private debt\u00a0if you are looking to raise working capital for business growth (see growth finance), infrastructure, real estate development or a buyout.\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Pros and cons of private debt?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \" Retain equity &#8211; retain control. Once you repay the principal and interest accrued, you keep same amount of equity. Unless it is a financed through\u00a0Convertible Loan Notes\u00a0(CLNs), which are debt instruments that can convert into shares in the future. Available to lower credit history &#8211; although the interest charged may be higher. Currently unregulated &#8211; exposes you to higher risks, lender and borrower alike. \"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Have you also considered?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Mezzanine finance\u00a0\u00a0Mezzanine finance is effectively a\u00a0business loan\u00a0with a twist. Arrangements can differ but in most cases if you can\u2019t pay back the debt within a pre-agreed timeframe then the debt becomes equity. In other words, the lender gets a share of equity in your business if you default on your loan \u2013 you\u2019re using equity as your security. Mezzanine finance is often subordinated to bank debt.\u00a0Special situations\u00a0In a \u2018special situation\u2019, i.e. if your business is going through a significant change (or you are facing bankruptcy) you may welcome an approach from a\u00a0special situations\u00a0fund.Special situations funds come under the banner of\u00a0private debt\u00a0funds \u2013 your investors (e.g. hedge funds, private equity companies and other intuitional investors) will usually take a controlling stake in your business.\u00a0Direct lending\u00a0\u00a0Direct lending comes under the umbrella of\u00a0private debt\u00a0(also known as private credit), which includes\u00a0mezzanine finance\u00a0and\u00a0special situations.\"\n                }\n            }          ]\n    }\n    <\/script>\n \n","protected":false},"excerpt":{"rendered":"","protected":false},"author":21,"menu_order":19,"template":"","segment":[300,302],"class_list":["post-2864","knowledge-hub","type-knowledge-hub","status-publish","hentry","segment-private-debt","segment-types-of-finance"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"<p>What is private debt? Private debt is an umbrella term that refers to debt products that are financed by non-bank institutions. Unlike publicly listed corporate bonds,\u00a0private debt\u00a0products are usually illiquid and not issued or traded on public markets. Private debt (also known as private credit) includes\u00a0direct lending,\u00a0mezzanine finance\u00a0and\u00a0special situations. Why choose private debt? If you\u2019re an established business looking for growth finance or a buyout you might want to consider either\u00a0direct lending\u00a0or mezzanine finance (a hybrid of debt and equity).\u00a0You could consider\u00a0private debt\u00a0if you are looking to raise working capital for business growth (see growth finance), infrastructure, real estate development&hellip;<\/p>\n","category_list_v2":"","author_info_v2":{"name":"Jimmy Rippon","url":"https:\/\/swoopfunding.com\/za\/author\/jimmyrippon\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/knowledge-hub\/2864","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/knowledge-hub"}],"about":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/types\/knowledge-hub"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":0,"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/knowledge-hub\/2864\/revisions"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/media?parent=2864"}],"wp:term":[{"taxonomy":"segment","embeddable":true,"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/segment?post=2864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}