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Debt vs. Equity:
Debt raises capital without giving up ownership; you repay on a schedule and keep your equity intact.
Private Debt (Private Credit)
Non‑bank lending from private funds/direct lenders,generally fasterand more flexible than banks.
Venture Debt:
Flexible term debt for high‑growth companies, typically used to extend runway alongside equity.
Growth Debt (Non‑Dilutive Growth Capital):
Term debt sized to revenue or growth metrics to fund business growth or expansion without issuing new equity.
Working Capital Solutions (RCF/ABL):
Rotating credit facility (Revolvers) and asset‑backed lines that fund day‑to‑day needs across receivables and inventory.
Acquisition Finance:
Debt used to acquire companies or assets, including unitranche, mezzanine, and delayed‑draw term loans.
Bridge Finance:
Short‑tenor funding that covers timing gaps to an equity round, acquisition close, or refinancing.
Refinancing & Recaps:
Replacing or re‑pricing debt, or using debt for dividends or buybacks.
Unitranche Debt:
A single‑tranche facility blending senior and subordinated economics to simplify the capital structure.
Mezzanine Debt:
Subordinated capital with higher coupons and often PIK and/or warrants.
Covenants:
Lender conditions to protect capital; typically lighter than bank loans in growth debt.
Warrants:
Equity rights sometimes included in debt; a lender “sweetener” that increases all‑in cost.
Term Sheet:
A non‑binding summary of proposed loan terms focused on repayment, security, and covenants.
Exclusivity:
A time‑bound period where your debt advisor is sole representative to run a focused, competitive process.
Debt Funding:
Raising capital by borrowing from lenders rather than selling equity.
Learn more about Debt Funding and various facilities
Loan Amount:
The total committed amount from a lender, including any conditional tranches.
Offer:
A formal proposal from a lender to provide funding, introduced by Fuse Capital.
Direct Lending:
Loans made directly by private credit funds (not syndicated), emphasizing speed, certainty, and bespoke structures.
Working Capital Loan (Revolving/RCF):
A revolving facility for short‑term liquidity and operating needs.
Asset‑Based Lending (ABL):
Facilities secured by assets, with availability set by a borrowing base.
Borrowing Base:
The formula that sets borrowing capacity against eligible collateral.
Advance Rate:
The percentage of eligible collateral value a lender will advance.
Receivables Financing (Invoice Finance):
Funding secured by accounts receivable to accelerate cash conversion.
Inventory Finance:
Funding secured by inventory to support production and fulfillment.
Purchase Order (PO) Finance:
Short‑term funding to fulfill confirmed purchase orders prior to invoicing.
Management Buyout (MBO) Funding:
Debt raised for incumbent management to purchase the business.
Management Buy‑In (MBI) Funding:
Debt raised for incoming management to acquire and run a business.
Leveraged Buyout (LBO):
Acquisition strategy using significant debt secured by the target’s assets and cash flows.
Delayed‑Draw Term Loan (DDTL):
A committed term facility drawable over time for acquisitions, capex, or milestones.
Share Buyback (Debt‑Funded Repurchase):
Using debt to repurchase equity shares to concentrate ownership.
Dividend Recapitalization (Dividend Recap):
Raising debt to pay a dividend to shareholders.
Debt Recapitalization:
Adjusting the mix of debt and equity to optimize the capital structure.
Debt Restructuring:
Amending, extending, or exchanging existing debt to address performance or liquidity pressures.
Special Situations Finance:
Capital for complex or time‑sensitive scenarios such as covenant resets or rescue financing.
Venture Leasing:
Financing for equipment or capital assets tailored for venture‑backed companies.
Extended Runway:
Additional months of cash life achieved by layering in debt alongside operational improvements.
Pricing & Fees Summary (Base Rate, Margin, OID, Fees):
Components that determine the all‑in cost of a facility.
Interest Types (Cash vs PIK):
Cash interest is paid periodically; PIK accrues to principal and increases total owed.
Amortization vs Bullet Maturity:
Amortizing loans repay principal over time; bullet loans repay principal at maturity.
Call Protection (Prepayment Premium/Make‑Whole/Soft Call):
Fees payable if debt is repaid early.
Original Issue Discount (OID):
An upfront discount to par that increases the lender’s effective yield.
Exit Fee:
A fee payable upon repayment, refinancing, or maturity, often as a percent of principal.
Commitment Fee:
A fee on undrawn committed amounts (e.g., DDTL or revolver availability).
Security Package (All‑Asset Debenture), Guarantees, Share Pledge:
Collateral and guarantees supporting the facility.
Negative Pledge:
A restriction preventing new security being granted to other creditors without consent.
Restricted Payments:
Limits on dividends, buybacks, and other distributions while debt is outstanding.
Financial Covenants:
Required thresholds such as minimum liquidity, leverage/net leverage caps, interest coverage/DSCR, or ARR growth.
Baskets and Carve‑Outs:
Pre‑agreed exceptions to provide operating flexibility.
Material Adverse Change (MAC):
A clause allowing lenders to withhold funding or take action upon a material negative change.
Intercreditor Agreement:
Contract setting rights, priorities, and remedies among multiple lenders or tranches.
Subordination Agreement:
Agreement establishing that one lender’s claims rank below another’s.
Information Memorandum:
A lender‑facing document prepared with Fuse Capital presenting your business and funding needs.
Term Sheet:
A non‑binding document summarizing proposed terms and conditions.
Conditions Precedent (CP) / Conditions Subsequent (CS):
Requirements before funding vs deliverables after closing.
Drawdown Mechanics:
Steps to request funds, including notice periods, minimum draw sizes, and timing.
KYC/AML Requirements:
Know‑your‑customer and anti‑money‑laundering checks required prior to funding.
Agreement:
The documents (Terms & Conditions, Key Terms, Scope of Work) defining the client relationship with Fuse Capital.
Scope of Work (SoW):
The services Fuse Capital will provide during the engagement.
Exclusivity Period:
A set period during which Fuse Capital is your sole advisor for debt funding.
Engagement Fee:
The initial fee paid to commence the advisory process.
Completion Fee:
A fee payable upon successful drawdown of funds.
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