ENTERPRISE VALUE LOANS

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Enterprise Value (EV) Loans: Financing Growth Based on Future Performance

For established businesses and corporate investors, capital needs often exceed the value of physical assets like real estate or equipment. Enterprise Value (EV) Loans are bespoke, senior debt instruments secured by the ongoing value and future cash flow generation of the entire operating business, typically measured as a multiple of EBITDA.

Service Funding Associates (SFA) provides direct, private EV financing designed for decisiveness. We quickly underwrite the true strategic and financial value of the enterprise, delivering the large-scale, flexible capital required for major corporate initiatives across the USA and globally.

What is an Enterprise Value (EV) Loan?

An EV Loan is a form of debt that allows businesses to borrow based on their total market value (Enterprise Value), which includes both assets and future earning potential. This is often necessary when traditional asset-backed lending (ABL) reaches its limit.

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Key Characteristics:

  1. Collateral:

    The loan is secured by a first or second lien on all the assets of the company, but the lending decision is driven by the company’s sustained EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

  2. Valuation

    The loan size is typically determined as a multiple of the company's annual EBITDA (e.g., 3.0x to 5.0x EBITDA).

  3. Purpose:

    Ideal for strategic growth events that require significant capital injection.

  4. Financing for Land Expansion and Improvement

    Whether securing adjacent acreage for expansion or financing major irrigation or infrastructure improvements, SFA provides the capital needed to increase yields and operational efficiency.

Key Applications for Enterprise Value Loans

EV Loans are powerful tools used by sophisticated businesses and sponsors to achieve high-impact financial goals:

Acquisition Financing (M&A)

Secure the necessary capital to complete strategic mergers or add-on acquisitions. Our speed provides the certainty required to satisfy sellers and close the deal before competitors can react.

Dividend Recapitalizations

Allow private equity sponsors or established business owners to extract equity from the company (pay themselves a dividend) without selling their ownership stake, utilizing the company's existing enterprise value as collateral.

Growth and Expansion Capital

Fund large-scale capital expenditures, new product launches, or geographic expansion that requires more funding than traditional collateral can support.

Working Capital and Restructuring

Provide significant working capital facilities or finance corporate restructuring initiatives that demand flexibility outside of conventional lines of credit.

SFA's Strategic EV Lending Advantages

In corporate finance, speed and certainty of execution are paramount, especially during mergers, acquisitions, or recapitalizations. SFA's direct private lending model excels where institutional banks falter:

  1. Rapid Due Diligence and Commitment:

    Our direct structure allows us to deploy senior credit analysts and decision-makers quickly. We can complete due diligence and issue a binding commitment faster than bank syndications, which is critical for winning competitive M&A bids.

  2. Financing for Complexity:

    We specialize in underwriting companies with complex cash flow profiles, international operations, or non-recurring revenue streams. Our global experience allows us to assess and fund enterprises with assets or revenue sources across various jurisdictions.

  3. Customized Term Structure

    Unlike standardized bank term loans, SFA structures the repayment schedule, amortization, and covenants to align precisely with the borrower's strategic business plan (e.g., funding a specific acquisition timeline or supporting a dividend recapitalization).

  4. Rate: From 5%

What you need to apply

  1. Basic details about you and your business
  2. Bank connection or bank statements for the past 3 months
  3. Business in good standing

Partner with SFA for Enterprise Capital

If your enterprise demands large, flexible capital solutions backed by the strength of your cash flow and future earnings, you need a lending partner with the expertise to understand your value quickly.

Service Funding Associates is ready to provide the direct, strategic financing that fuels corporate ambition.