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AFO · Expansion capital

Capital sized on the expansion, not the historical run rate.

Expansion capital — a second location, a new production line, a step-change in headcount — fails when it's sized purely on historical cash flow. The new location won't be profitable in month one. The lender needs to see a credible projection of the post-expansion cash flow and the ramp window in between, with the coverage maintained throughout.

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What makes this use case distinct

  • Sized on post-expansion projection, not just historical run rate.
  • Senior + grant + (if needed) mezz layered as a coherent stack.
  • Coverage and covenant headroom modelled through the ramp window.

How this is usually structured

Expansion, in practice.

Conventional senior debt funds expansion when the business has audited or review-engagement financials, 1.2–1.5x EBITDA coverage on the proposed total debt service, and a defensible projection of the ramp. The package matters: normalized historicals, projection model, leverage and coverage analysis, management discussion. Built to the standard the lender's credit committee actually works from.

Federal grants and refundable tax credits often layer underneath senior debt on expansion projects. Regional Development Agencies fund up to 25–50% of qualifying expansion costs as non-repayable contributions. The Strategic Innovation Fund covers larger industrial projects. The Clean Technology ITC refunds 30% on eligible equipment within the expansion. Pairing debt with non-dilutive grant capital lowers the leverage requirement and the blended cost of capital.

Mezzanine and private credit fill the gap when the senior layer is tapped out — common when the expansion is large enough that the senior facility can't carry the full size on coverage. Higher cost (12–18% all-in) but preserves equity, important when the founder isn't ready to take on outside shareholders.

10 programs in the catalog · 3 live

Programs that fit expansion.

Each card links to the program profile. Coming-soon programs are surfaced honestly — the screener routes there with a consultation CTA instead of a self-serve apply link until the integration is wired through.

Other use cases

Funding a different need?

Each use case has its own structuring conversation. Working capital and equipment look nothing like an MBO; an export ramp doesn’t look like a refinance.

  • 3 programs

    Acquisition

    Acquisition financing turns on the combined entity, not the buyer alone. Lenders underwrite the deal on pro forma cash flow, post-synergy coverage, and the buyer's integration plan. The package needs to demonstrate that the combined business carries the proposed debt cleanly — and that the buyer has run the diligence to back the projection.

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  • 3 programs

    Refinancing

    Refinancing is rarely just about the rate. The original structure was set when the business was a different size, in a different rate environment, with a different mix of operating priorities. A refi is a chance to reset the structure — term, covenants, advance rate, guarantee scope — to where the business actually is now, not where it was three years ago.

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  • 3 programs

    MBO / buyout

    Management buyouts — buying out a founder, admitting a management partner, acquiring the business you've been running — are leverage transactions first and equity transactions second. The leverage stack, the vendor note, and the equity injection each carry distinct economics that compound over the five-to-seven years it usually takes to retire the debt.

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Match the instrument to the use, not the other way round.

Twenty-minute call. Bring the use of proceeds and a rough sense of where the business stands today; we’ll walk through which instrument or stack fits, what providers will want to see, and how long the engagement takes.

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