Structured capital for B2B businesses
Most financing is bought off the shelf: a term loan, a line of credit, an advance. Structured capital is the opposite, built to measure. The structure starts from how cash actually moves through your business and works backward to a set of facilities whose repayment matches it. For companies whose situation does not fit a product, the structure is the product.
Short answer: structured capital means designing a company's debt as a system rather than choosing a single loan: typically a senior asset-based piece sized to receivables and inventory, term or junior capital where the base falls short, and elements like interest-only periods, sale-leasebacks, or seller notes fitted to the specific cash flows. B2B companies reach for it when refinancing complex debt, funding step-change growth, making acquisitions, or exiting positions, like stacked MCAs, that no single product can unwind.
A concrete example
A distributor owes $1.8M across four merchant cash advances, needs $700K of seasonal inventory, and carries $2.2M of receivables plus $1.5M of owned equipment. No single loan solves that. A structure might: a receivables-and-inventory revolver providing roughly $2M of availability to retire most of the stack and fund the season, and an equipment term loan or sale-leaseback covering the remainder, with an interest-only period while the daily-debit damage heals. Three instruments, one design, and a monthly debt service the cash flow actually covers. The composite examples on our case studies page follow this pattern repeatedly.
The building blocks
- Senior asset-based facilities: revolvers against receivables and inventory, the foundation of most structures. See asset-based lending.
- Term debt: fixed repayment against equipment, real estate, or cash flow, for the portion of need that does not revolve.
- Junior and mezzanine capital: second-lien or subordinated pieces filling the gap between what senior lenders advance and what the situation requires.
- Sale-leasebacks: converting owned equipment or property into liquidity while keeping the use of it.
- Timing features: interest-only periods, seasonal payment schedules, delayed draws, and accordion features that expand the facility as the business grows.
When a company actually needs structure
The tell is that honest lenders keep declining pieces of the problem. The revolver desk likes your receivables but will not touch the MCA payoff size; the term lender likes the equipment but not the working-capital gap. Structure exists to make several specialized appetites add up to one solution. Common triggers: multi-position debt restructurings, acquisitions where the target's assets fund part of the price, growth ramps that need capital ahead of the receivables, and transitions, ownership changes, turnarounds, carve-outs, where history and future look different.
Sequencing and lien coordination, where structures live or die
A structure is also a closing plan. Senior and junior lenders must agree on intercreditor terms; existing liens must be paid off or subordinated in the right order; payoff letters, releases, and fundings have to land simultaneously. This coordination is unglamorous and decisive, a single stale UCC filing can block a senior lender's position and stall the entire closing. It is also where an advisor earns the fee: designing the structure is half the work, and landing every piece at once is the other half.
What structured capital is not
It is not exotic for its own sake, and it is not a way to borrow more than the business can service; a structure that only works in the spreadsheet is a failure with extra steps. The discipline runs the other direction: start from sustainable monthly debt service, then design backward to the combination of facilities that delivers the capital inside that constraint. If a simple product solves the problem, the right structure is the simple product.
Common questions
What is structured working capital?
Working capital financing designed as a system rather than a single product: usually a receivables-based revolver at the core, with term or junior pieces where the borrowing base cannot cover the full need, and repayment timing matched to how the company collects. The goal is capital that breathes with the operating cycle.
Is structured capital only for large companies?
No. The lower middle market is where it is often most needed, because companies from $1M to $100M in facility size frequently have exactly the complex, mixed situations, part working capital, part refinance, part growth, that off-the-shelf products cannot cover in one instrument.
How is structured capital priced?
By layer. Senior asset-based pieces commonly start near 10% annually; junior and mezzanine layers run through the mid-teens and beyond, reflecting their position. The blended cost across the structure is what matters, and it is designed against the company's sustainable debt service, not against any single sticker rate.
How long does a structured transaction take to close?
Longer than a single facility, because multiple lenders, intercreditor agreements, and lien coordination are involved: commonly four to eight weeks for a two-piece structure, more for complex restructurings. Preparation, clean financials, A/R aging, debt schedule, lien search, is the biggest accelerator.
Does Modavva provide the capital itself?
No. Modavva Capital designs the structure and arranges the pieces across a network of private credit, asset-based, and special-situations providers, negotiating each layer on the operator's behalf. Advisory fees and terms are set out in a written agreement; the initial review is free and confidential.
Situation too complex for an off-the-shelf loan?
Tell us where things stand. A Modavva advisor will review your situation confidentially, at no cost and with no obligation, and come back with whether and how it can be restructured. Typically a same-week first response.
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