Subordinated loans (also: mezzanine capital) are a form of financing with higher interest rates for companies. The risk of this form of financing lies, on the one hand, in the possibility of final repayment - in comparison with loans, which are usually repaid quarterly. On the other hand, in the event of insolvency, the lenders are always "at the back of the queue", albeit ahead of the company's equity capital. If a company becomes insolvent, the senior loans (often banks) are serviced first. Only then do the subordinated loans follow.
When do I receive interest and repayment?
We offer various forms of subordinated loans, which you can find in the details of each investment project.
You can choose between cash interest and interest in kind (e.g. interest in vouchers). The repayment and interest rhythm can vary per project, from quarterly, half-yearly to annually or bullet.
A possible success-based interest at the end of the term makes a subordinated loan a so-called participating subordinated loan. Participating here stands for profit-dependent, as the success-based interest is linked to certain revenue scenarios. The project is marked accordingly if a success-based interest is offered.