PE Portfolio Companies
Private equity firms use debt to fuel add-ons, fund growth, return capital to LPs, and bridge to exit. The right lender depends on the use case — here's how to match each scenario to the right capital.
The most common PE portco debt use case. The platform company acquires a smaller competitor or complementary business. Lenders underwrite the combined entity's pro-forma EBITDA. Key: have the quality-of-earnings report ready — lenders price off it.
The portco takes on new debt to pay a dividend to the PE sponsor. Lenders evaluate whether the business can service the new debt load. Dividend recaps are scrutinized more heavily than growth capital — the lender knows the cash is leaving the business.
Debt to fund organic growth: new hires, market expansion, product development. Lenders look at revenue trajectory and unit economics. SaaS and recurring-revenue businesses are favored here — predictable cash flows make underwriting straightforward.
The most time-sensitive use case. When the existing facility matures, the portco must refinance. Starting early (6-12 months before maturity) gives you negotiating leverage. Waiting until the last 90 days puts the lender in control.
Short-term debt to fund operations while the PE sponsor prepares the company for sale. Lenders underwrite based on the expected exit valuation. These deals are smaller and faster — the lender knows their capital is short-duration.
Lender coverage for PE portcos
10 lenders in our database actively work with sponsor-backed companies. Filter by check size, sector, close speed, and sponsor requirements.
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