Investor bringing lender

“My deal has $1.6m of EBITDA. I was looking for a conservative, non-PG senior note, of maybe $2m, which is 1.25x EBITDA, very conservative DTV. Everyone kept saying I should ask for 2x EBITDA, or $3-4m, because otherwise the check size was too small. I received a lot of rejections. Hustled hard. Eventually got one term sheet; 14.75% rate, 100% sweep of excess cash flow. My lead investor actually interfered, and said that they wouldn’t support my deal if I brought in a lender with such onerous terms. But I think I was lucky, they didn’t leave me hanging. The lead investor pulled in their long-term lender with whom they have a strong relationship, a regional bank, and agreed to guarantee the debt, collateralized in some of their other holdings. In exchange I had to give them a bigger allocation of the equity, where they are 2/3 of it now. The new loan is 8% interest, 5-year revolver, no amortization. Huge value-add by this investor.“