Mezzanine capital, which is in the form of subordinated loan or shareholder loans is recognized in the balance sheet as a liability (mezzanine debt). Traditional lenders usually expect the mezzanine to be linked to the economic equity as it does not reduce the potential collateral. This has the consequence that after introduction of mezzanine capital, the line of credit can be increased, which in turn allows a more favorable funding mix.

The mezzanine minimum volume of at least $0.5 million as a result of the comparison to the higher transaction costs. The more complicated test is often in the form of an external rating and the comprehensive presentation of the mezzanine contract, including a multi-year plan.

A detailed multi-year plan that includes the date of the proposed repayment is of great significance to growth-oriented enterprises. Growth companies reinvest their cash flows generated so that they are always available.

This is especially, in terms of maturity (usually between 7 to 10 years), termination rights, minimum return, profit and loss provisions or terms of repayment. Marketable securities are subject to prospectus liability and approval by the Financial Supervisory Authorities.

However, all credit institutions should adhere to the confidentiality of information collected by loan officers and Debt Collection Software. Schrickel (2000) suggests that the information and personal documentation should be kept archived on meticulous control.

The process of credit analysis all information related to the customer’s financial situation and Debt Collection Software must be considered as the analysis of the data will provide more accurate information for decision making. The loan officer should be aware of the various legal documents.

The registration information is a summary of the client’s life, through which the creditor has the possibility to obtain an initial knowledge about the same. The analysis of suitability is the collection and analysis of information related to the suitability of the customer. This analysis is based on collecting information on the credit applicant with companies specialized in managing credit risk.

Companies like Professionals, Boa Vista Services (SCPC), Equifax and SPC (Service Credit Protection) are examples of organizations that can provide useful information about the credit status of the customer.

The analysis of suitability should be one of the first information checked. If the client does not have negative information, other details may be collected and analyzed for the analysis of the total risk. The suitability of the customer can be further classified into four categories.

No Restrictive: when there is negative information about the customer in the credit market.

Alerts: when there are old records in the credit market, already solved, which do not prevent the granting of new credits. Requires a more careful analysis by the loan officer.