.avif)
Learn how U.S. companies refinance $100M+ of debt using private credit, ABL and equity while managing maturities, liens and liquidity.
Refinancing $100 million, $250 million or more of corporate debt is not simply a search for a lender willing to write a larger check.
At this level, management must determine which obligations should be repaid, how much debt the company can sustainably carry, which assets should secure each facility and how much liquidity must remain available after closing.
Private capital can provide another route when conventional bank, syndicated-loan or capital-markets solutions do not fit the company's timing, leverage, collateral or transaction complexity.
Quick Answer: For a U.S. company refinancing more than $100 million, private capital can combine first-lien direct lending, unitranche debt, asset-based lending, junior debt and preferred equity. The right structure depends on sustainable cash flow, leverage, collateral, maturity pressure and post-close liquidity; replacing every dollar of old debt with new debt is not always prudent.
Private capital is broader than one type of loan.
The Federal Reserve describes private credit as lending originated by nonbanks and generally negotiated directly between lenders and borrowers rather than issued through public debt markets.
For a large corporate refinancing, that capital might come from a direct-lending fund providing a first-lien term loan, a unitranche lender combining senior and junior risk, an asset-based lender financing receivables and inventory, a specialty lender financing hard assets, or investors contributing preferred or common equity.
Private credit is now a meaningful component of U.S. corporate finance. Federal Reserve Financial Accounts data for the second quarter of 2026 estimated that private-credit loans represented 7.1% of U.S. nonfinancial corporate debt.
But private credit should not be confused with easy credit.
Institutional private lenders still underwrite leverage, cash flow, enterprise value, collateral, management, industry risk, covenant protection and the company's ability to refinance or repay the facility at maturity.
The primary advantage is structural flexibility.
A bank may be comfortable with part of a company's capital structure but unwilling to provide the entire amount because of leverage, concentration, collateral or internal portfolio constraints. A private lender may be able to underwrite a larger hold, customize amortization or combine several financing needs within one transaction.
That flexibility can be useful when a company needs to refinance an approaching maturity, consolidate multiple lenders, reset restrictive covenants, finance an acquisition simultaneously, separate working-capital debt from term debt or recapitalize after a period of rapid growth.
The Federal Reserve's July 2026 Senior Loan Officer Opinion Survey shows why borrowers should compare much more than interest rates. Banks reported changing C&I loan terms across dimensions such as maximum loan size, maturity, spreads, covenants, collateral requirements and interest-rate floors. Competition from both banks and nonbanks was among the factors affecting credit terms.
Private capital is therefore not automatically a cheaper substitute for bank debt.
Its value may come from certainty of structure, flexibility or risk tolerance, even when the headline cost is higher.
Start with a complete debt map.
Before approaching capital providers, management should identify the principal balance of every existing facility, accrued interest, unused commitments, maturity dates, amortization requirements, collateral, guarantees, UCC filings, financial covenants, cross-default provisions and prepayment obligations.
Then calculate the actual payoff requirement.
A company may say it has "$120 million of debt," but the closing requirement could be higher because of accrued interest, call protection, swap termination costs, original issue discount on the replacement financing, lender fees and legal expenses.
The refinancing also needs to preserve sufficient liquidity.
If paying off the old lenders leaves only a few weeks of operating cash, the transaction has solved a maturity problem while potentially creating a liquidity problem.
That is why a $120 million debt balance does not automatically justify issuing exactly $120 million of replacement debt.
The answer comes from sustainable cash flow, not the amount currently outstanding.
Adjusted EBITDA is normally one starting point, but institutional lenders will need to understand how EBITDA converts into cash after taxes, working-capital movements, maintenance capital expenditures, lease obligations and other mandatory payments.
Management should then stress the model.
What happens if revenue drops?
What if margins compress?
What if customers take longer to pay?
What if interest rates remain higher than expected?
What if the business needs an unexpected $10 million capital investment six months after closing?
The Office of the Comptroller of the Currency defines refinancing risk as the possibility that a borrower will be unable to replace existing debt at reasonable terms. It notes that factors such as high leverage, weak liquidity, poor performance and approaching maturities can increase that risk, and that lenders should assess debt maturities, refinancing costs, market liquidity and stressed collateral values.
A refinancing therefore needs two answers:
Can the company service the new debt today?
And:
Is there a credible way to reduce, repay or refinance it at maturity?
Those are different questions.
There is no universal structure, but several layers frequently need to be considered.
A direct lender may provide the primary corporate term loan and take a first-priority security interest over substantially all eligible assets.
The facility could be fixed or floating rate and may include scheduled amortization, excess-cash-flow sweeps and a large payment at maturity.
The borrower should pay particular attention to EBITDA definitions, permitted add-backs, debt incurrence tests, acquisition baskets, restricted payments and prepayment provisions.
A unitranche structure can place financing that economically resembles senior and junior debt into one borrower-facing facility.
This can reduce the complexity of managing separate senior and mezzanine lenders.
It does not eliminate structural complexity behind the scenes, nor does it automatically produce the lowest cost of capital.
A company with substantial eligible accounts receivable or inventory may use a revolving ABL facility for operating liquidity while a separate private-credit term lender finances the longer-term corporate debt.
That can be preferable to forcing permanent acquisition or refinancing debt to fund normal working-capital fluctuations.
Mehmi Financial Group also evaluates asset-based lending structures as part of broader financing requirements.
If the company cannot prudently support the entire refinancing as first-lien debt, subordinated debt, second-lien financing or preferred equity may fill part of the capital structure.
That capital is usually more expensive because it accepts greater risk.
But it can be safer than placing excessive leverage into the senior facility.
Sometimes the best refinancing includes an equity contribution.
Not necessarily.
Different asset classes can support different forms of financing.
Receivables and inventory naturally align with an asset-based revolving facility. Long-life machinery may be better suited to equipment financing. Real estate may support a separate mortgage facility. The residual enterprise value may then support the corporate term loan.
This can reduce pressure on one lender to finance assets it does not understand or value efficiently.
For example, Mehmi's U.S. guide on preserving an operating line when financing long-life machinery explains why permanent equipment needs and revolving working capital should not automatically be financed from the same facility.
Operating companies that already own valuable machinery can also evaluate asset-level refinancing. Mehmi's U.S. equipment-financing guides for Cincinnati businesses, Memphis businesses, Knoxville businesses and Columbus businesses discuss refinancing eligible owned equipment and evaluating existing obligations, asset condition and cash flow.
Those articles address smaller asset-level transactions rather than $100 million corporate refinancings, but the underlying credit principle still matters: match the financing term and lender to the asset producing the cash flow.
A company with significant unencumbered equipment may also evaluate equipment refinancing or sale-leaseback structures rather than increasing the corporate term facility.
They can determine whether the proposed capital stack works at all.
A first-lien private lender, ABL provider and second-lien lender may each want claims over some portion of the company's assets.
Those claims have to coexist.
Under UCC Article 9, priority between competing perfected security interests is generally determined by filing or perfection timing, subject to the Code's other priority rules. Article 9 also permits creditors to subordinate their priority by agreement.
That makes UCC searches and intercreditor negotiations critical before closing.
For example, an ABL lender may require first priority over receivables, inventory and related cash proceeds while the term lender receives priority over equipment or other assets. Their agreements must also govern control of proceeds, enforcement rights, standstill periods and what happens after default.
Actual perfection requirements depend on the collateral, debtor and applicable state law, so transaction counsel should review the specific structure.
The headline rate is only one component of economic cost.
A borrower refinancing $100 million or more should model original issue discount, upfront fees, commitment fees, unused-line charges, interest-rate floors, prepayment premiums, make-whole provisions, call protection and mandatory cash sweeps.
Covenant definitions can be equally important.
A facility at 10% with flexible acquisition and investment baskets may serve management better than a nominally cheaper facility that makes every growth initiative dependent on lender consent.
The company should also understand whether permitted EBITDA add-backs are capped, how synergies are treated, what triggers mandatory prepayment and whether asset-sale proceeds can be reinvested.
Private capital should be evaluated on total economics plus operating flexibility, not the coupon alone.
This example is hypothetical. It is not a Mehmi Financial Group financing offer, lender quote or indication of available terms.
Assume a U.S. company needs to refinance $120 million of existing debt and expects another $4 million of refinancing expenses, including a hypothetical original issue discount, legal expenses and existing-lender payoff costs.
Total refinancing uses are therefore $124 million.
Assume the company obtains a $110 million first-lien private-credit facility and contributes $14 million of balance-sheet cash or new equity.
For illustration, assume the new facility carries a 10.5% annual interest rate, has a five-year maturity, requires monthly interest payments plus 1% annual straight-line principal amortization, and is issued at a 2% original issue discount.
The 2% OID equals $2.2 million and is included within the assumed transaction expenses. Other expenses are illustrative and would depend on the transaction.
Monthly principal amortization would be approximately $91,667.
The first monthly payment would be approximately $1.054 million, consisting of about $962,500 of interest plus principal amortization.
Because principal gradually declines, the 60th scheduled monthly payment would fall to approximately $1.007 million.
During the first year, scheduled debt service would total approximately $12.60 million.
Over the full five years, scheduled cash interest would total approximately $56.33 million.
Only $5.5 million of principal would have amortized before maturity, leaving a $104.5 million balloon payment.
If the facility remained outstanding for all five years, total principal and interest paid would be approximately $166.33 million, before considering the economic cost of the $2.2 million OID and other transaction expenses.
That balloon is the most important part of the example.
The company has solved today's $120 million maturity, but five years later it still needs a credible strategy for more than $100 million of remaining principal.
If management cannot demonstrate realistic deleveraging, asset-sale capacity, equity support or future refinancing access, reducing leverage at the current closing may be more prudent than maximizing the new loan amount.
No.
Interest deductibility should be modeled before the capital structure is finalized.
The IRS states that when Section 163(j) applies, the business-interest deduction is generally limited to business interest income plus 30% of adjusted taxable income plus applicable floor-plan financing interest. For 2026, the inflation-adjusted gross-receipts threshold associated with the small-business exception is $32 million, subject to the statute's detailed rules and exceptions.
A company refinancing more than $100 million of debt should not assume the entire cash-interest expense automatically produces a current tax deduction.
Tax counsel and the company's accounting advisers should model the specific borrower structure.
A $100 million refinancing requires an institutional-quality data package.
Management should expect lenders to examine historical and interim financial statements, detailed projections, the complete existing debt schedule, covenant calculations, customer and supplier concentration, accounts-receivable and inventory aging, working-capital trends, capital expenditures, ownership structure, litigation or contingent liabilities, existing collateral and UCC filings, and the company's proposed sources and uses.
The lender will also want to understand exactly why the existing financing is being replaced.
Refinancing because a healthy company has an approaching maturity is different from refinancing after recurring covenant defaults or continuing operating losses.
The latter may still be financeable, but it requires a credible explanation of what changes after closing.
Replacing lenders does not repair an operating model that continuously consumes cash.
Private debt should not be used merely to delay a problem.
If a company is experiencing structural operating losses, recurring liquidity shortfalls or leverage that remains unsustainable even under an optimistic forecast, adding another expensive debt instrument may worsen the situation.
Alternatives can include contributing additional equity, selling noncore assets, negotiating an amendment or maturity extension with incumbent lenders, selling a division, reducing the required refinancing amount or pursuing a broader restructuring.
A company also should not monetize every unencumbered asset simply because lenders are willing to advance against it.
Collateral represents future financing capacity.
Using all of it to solve today's maturity can leave the company with few options when the next downturn, acquisition opportunity or equipment replacement arrives.
Well before the maturity becomes an emergency.
A large private refinancing can require management diligence, third-party quality-of-earnings work, collateral analysis, appraisals, UCC review, lender credit approval, term-sheet negotiation, legal documentation, intercreditor agreements and coordination of existing-lender payoff letters.
The closer the company gets to maturity without a credible refinancing path, the weaker its negotiating position may become.
Starting earlier also creates room to compare structures rather than accepting whichever proposal can close.
Yes, depending on the borrower and transaction. Some institutional direct lenders can hold large exposures themselves, while other transactions may involve a club or several capital providers. Availability ultimately depends on underwriting, leverage, cash flow, collateral, industry and lender concentration limits.
No universal comparison applies. Private credit may carry higher headline pricing in some transactions, but the borrower should compare the complete economics, including fees, amortization, covenants, collateral requirements, prepayment costs and operating flexibility.
Yes. A company can potentially use an ABL revolver for receivables and inventory while a separate lender provides longer-term corporate debt. The lenders need appropriate lien-priority and intercreditor arrangements.
Yes, when the company owns eligible machinery, vehicles or other productive assets. Separate asset financing can potentially reduce the amount that must be carried by the corporate term facility, although asset eligibility and advance amounts remain lender-specific.
Not necessarily. Institutional corporate facilities may rely primarily on corporate guarantees, collateral and enterprise value rather than an owner's personal guarantee, but guarantee requirements depend on the borrower, ownership structure, credit profile and lender.
The solution may require a combination of lower senior leverage, equity, preferred equity, junior debt, asset monetization or negotiation with incumbent lenders. A partial equity paydown can be more sustainable than forcing the entire existing balance into replacement debt.
Not automatically. The most appropriate proposal is the one whose debt service, maturity, covenants, collateral package and total cost remain workable under realistic operating scenarios.
For a refinancing of this size, the useful starting point is the complete capital structure rather than a generic loan request.
When speaking with Mehmi Financial Group, be prepared to discuss the financing amount, United States jurisdiction and relevant states, existing debt being refinanced, use of funds, maturity dates, EBITDA and cash flow, available collateral, current liens and desired closing timing.
Mehmi Financial Group operates as a financing brokerage and intermediary rather than a direct lender. It can help evaluate the financing requirement and potential bank, private-credit, asset-based and specialty-capital channels, while actual terms, underwriting and approval remain with participating capital providers.
Call 833-863-4644 or contact Mehmi Financial Group to discuss the proposed refinancing.
.svg){kind=small}