Debt Financing Explained - From Entrepreneur's perspective

Private equity is permeating a growing swath of the economy, including profitable smaller businesses. In this interview, Juan E. Alva explains his firm’s strategy of providing debt capital to these businesses alongside the private equity firms who invest equity capital. Operating as an SBIC fund, the firm combines capital from private investors with leverage from the U.S. Small Business Administration as part of the total loan, and coupled with creative debt facility structuring, are able to generate higher returns than would otherwise be possible as a senior lender. This interview is yet another example of the increasing breadth and creativity of credit investors and non-bank lenders who are stepping into the gap created as banks pulled back from many types of loans during the Great Financial Crisis.

About the Host:

Jan Brzeski founded Arixa Capital in 2006 and serves as Managing Director and Chief Investment Officer. In this capacity, he has ultimate responsibility for the Firm’s investment strategy, risk management and operations. He has participated in more than 1,600 real estate transactions, investing over $1.7 billion on behalf of Arixa’s investors and partners. Since he founded Arixa Capital, it has become one of the West Coast’s premier non-bank real estate lenders, providing small balance loan solutions to lower middle market residential and commercial investors and developers.

About the Featured Expert:

Juan E. Alva is a Managing Director of Pelham S2K, where he is responsible for sourcing, evaluating, executing, and managing investments.

Previously, Juan was a Partner at Fifth Street Management, where he was responsible for originating investment opportunities and also served as the Head of Strategy and Corporate Development. In addition, Juan was a Principal in Fifth Street Management’s two SBIC funds. Prior to Fifth Street Management, he was an investment banker in the Financial Institutions and Corporate Finance Groups at Goldman Sachs, CFO of ClickServices (a wireless software company majority owned by Cisco Systems) and a senior investment banker at Trinity Capital, a boutique investment bank focused on the food and restaurant industries.

Juan earned a B.S. in Economics from The Wharton School of the University of Pennsylvania and a B.S. in Engineering from The Engineering School of the University of Pennsylvania.

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Beyond Wall Street is presented by Arixa Capital.

Arixa Capital is one of the West Coast’s premier private real estate lenders and fund managers providing small balance loan solutions to lower middle-market residential and commercial investors and developers. Since inception, the company has originated more than $2 billion in loans and has generated attractive risk-adjusted returns for its partners and investors.

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