WE HELP BANKS SAY "YES" MORE OFTEN
When a bank customer has a financing need outside its box, whether due to leverage, growth that outruns the credit policy, a structure the bank can't hold alone, Capitala helps the bank say “yes” to that customer.
As a complementary capital provider, not a competitor for the banking relationship, we help banks finance existing and prospective customers they couldn't fully serve on their own, while the bank retains the deposit, treasury, and cash-management relationship.
The result is a win for all parties at the table: the bank, the small business, and Capitala.
Why Banks Partner with Capitala
The competitive landscape for lower middle-market lending has shifted. Bank consolidation has thinned the ranks of mid-sized institutions, and non-bank lenders have taken meaningful share of commercial credit. Banks that partner with private credit providers are able to keep more relationships and capture more of their clients' full financial lives.
Banks participate in Capitala-originated deals via first-out unitranche loans, revolving credit facilities, and traditional banking relationships. Additionally, banks may bring us into their clients' financings to help solve a capital need.
Capitala has more than two decades of experience investing across market cycles and a straightforward, relationship-driven approach. We are not a bank and we do not compete for deposits, treasury, or the core banking relationship. Our flexible capital can help fill the client’s gap.
How the Partnership Works
The relationship works two ways. Whether bank-originated or Capitala-originated, the bank stays in a first-lien, senior secured position.
Co-Investment in Capitala Deals
When Capitala originates a unitranche loan, we offer our bank partners the opportunity to participate alongside us — typically taking the first-out portion of the unitranche. Banks gain access to quality, senior secured assets and new client relationships they might not have sourced independently.
Lending Partner on Bank Deals
When a bank has a client whose need either exceeds or doesn't fit the bank's appetite, Capitala can join the financing as a complementary lending partner. We provide the additional capital and flexibility that lets the deal get done while the bank keeps the relationship.
One First-Lien Loan, Shared
First lien alongside the bank — not senior/subordinated
In a traditional senior-subordinated structure, the bank holds senior debt while a fund holds a separate, junior subordinated piece.
Capitala partners with the bank to originate a unitranche first-lien loan. The facility is divided into a first-out tranche, which the bank typically holds, and a last-out tranche held by Capitala.
For the bank, that means a senior secured, first-out position with a familiar risk profile. For the borrower, it means one loan, one agent, and one relationship to manage.
A Win / Win / Win
The best partnerships create shared value. When a Capitala bank partnership works, three parties come out ahead at once.
- Retains the client and the core banking relationship
- Says "yes" to deals it couldn't hold alone
- Stays in a senior secured, first-out position
- Deepens deposit, treasury, and cash-management ties
- Obtains the capital needed to grow
- Keeps its trusted banking relationship intact
- One loan, one agent, one point of contact
- A financing partner invested in its success
- Access to quality, relationship-driven opportunities
- Risk-adjusted investment opportunities consistent with our underwriting approach
- Long-term partnerships that compound over time
- A network that strengthens with every deal
What We Look For
A quick guide for bankers considering whether an opportunity is a fit for partnership.
Business
- Established, non-cyclical companies
- We tend to avoid highly cyclical or asset-price-driven sectors such as energy, retail and restaurant, and real estate.
Financial
- $5 – $20 million TTM EBITDA
- Greater than 10% EBITDA margin
- Demonstrated history of positive cash flow
Let's Explore a Partnership
Have a client whose financing needs fall outside your box? Or want to learn how partnering with Capitala could help your bank serve more of its customers? Our team would welcome the conversation.
Important information. This page is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security or to enter into any financing arrangement, which may be made only through definitive documentation. Nothing herein constitutes investment, legal, tax, or regulatory advice. Any structures, tranches, and terms described are illustrative only and are determined on a transaction-by-transaction basis. Partnership arrangements are subject to applicable law and to each institution's own regulatory and internal requirements.
