2. Greenline Ventures is a Denver-based financial institution providing flexible capital for economic development activities focused on small and medium businesses located in low-income communities.
Larger-sized Transactions for Established Businesses and Real Estate Projects
Raised over $1.8 billion to generate $2.5 billion of investments - over 94% in high distress LICs
$547mm in direct NMTC allocations generated $700 mm in high distress LICs, creating:
over 30,000 direct jobs
$388 mm in 29 businesses with environmentally sustainable features
$168 mm in 15 businesses focused on, or owned by women or minorities
$207 mm in estimated new annual tax revenue
Mezzanine / Subordinate and other flexible loans of $250,000 - $2,000,000 with terms of 1 – 7 years
Mezzanine debt financing for growing or established businesses needing to expand or establish banking relationships
Flexible structures and credit standards provide increased proceeds at lower-than-market rates
Equity and hybrid capital investments of $50,000 - $500,000
Start-up and early stage growth companies; may be pre-bankable
Often women and minority-owned
Portfolio companies in environmentally sustainable health, clean tech, food/ag, fintech and consumer businesses
COMMUNITY GROWTH FUND
SUBORDINATE DEBT FUND
NMTC FUNDS

3. Greenline Ventures is a Denver-based financial institution providing flexible capital for economic development activities focused on small and medium businesses located in low-income communities.
Larger-sized Transactions for Established Businesses and Real Estate Projects
Raised over $1.8 billion to generate $2.5 billion of investments - over 94% in high distress LICs
$547mm in direct NMTC allocations generated $700 mm in high distress LICs, creating:
over 30,000 direct jobs
$388 mm in 29 businesses with environmentally sustainable features
$168 mm in 15 businesses focused on, or owned by women or minorities
$207 mm in estimated new annual tax revenue
Mezzanine / Subordinate and other flexible loans of $250,000 - $2,000,000 with terms of 1 – 7 years
Mezzanine debt financing for growing or established businesses needing to expand or establish banking relationships
Flexible structures and credit standards provide increased proceeds at lower-than-market rates
Equity and hybrid capital investments of $50,000 - $500,000
Start-up and early stage growth companies; may be pre-bankable
Often women and minority-owned
Portfolio companies in environmentally sustainable health, clean tech, food/ag, fintech and consumer businesses
COMMUNITY GROWTH FUND
SUBORDINATE DEBT FUND
NMTC FUNDS

4. What is Mezzanine Debt?
Mezzanine Debt is a loan, typically provided by a non-bank lender, that is higher in the capital stack and takes the place of equity. It is higher risk/higher return for the Lender.
Subordinate, Junior and Mezzanine are used somewhat interchangeably since they increasingly overlap and share features.
Historically, Mezzanine Debt referred to subordinate debt that was secured by a pledge of the ownership interests in the business.

5. Subordinate Debt Structures
Size is typically based on multiple of EBITDA less senior debt amounts
$500K EBITDA at 4.0X multiple less $1.25MM senior = $750K sub debt
Fixed charge coverage of 1.25X
Subordinate debt has junior security interest (or may even be unsecured) behind ABL debt and/or Senior debt.
Higher risk means higher total returns
10%-15% current pay, often interest only to allow more cash flow
20%-25% total IRR via equity rights, accrued interest and/or exit fees
More security means lower rates
Term is typically 3-5 years with extension options
At maturity:
Loan is repaid, or
Loan is refinanced, or
Loan is taken out through sale or company or other exit

6. Subordinate Debt Uses in Economic Development
Economic Development Situations for Sub Debt:
Growing businesses are the most likely situation
New businesses are often thinly capitalized.
Expansion capital is usually costly equity capital.
For new businesses, Bank Debt is often limited to ABL loans with low advance rates and strict credit requirements (personal guarantees / pledge or personal residence).
Sub-debt funded growth is typically accompanied by increase in direct and indirect jobs.
Recapitalization of existing businesses in strong sectors
Good companies may have balance sheet problems.
Companies may have have run into trouble for external (but solvable) reasons.
Sub-debt funded recapitalization often results in jobs preservation.
Acquisition capital

7. SRI and Impact Investing in the Mezz/Sub Debt Space
Many 501(c)(3) entities are turning to PRI (Program Related Investments) to fill need for distribution of funds (5% requirement).
Must meet foundation’s exempt purpose
Production of income can not be a “significant purpose”
IRS’ specific examples include:
Low-interest or interest-free loans to needy students,
Investments in nonprofit low-income housing projects,
Low-interest loans to small businesses owned by members of economically disadvantaged groups, where commercial funds at reasonable interest rates are not readily available,
Investments in businesses in low-income areas (both domestic and foreign) under a plan to improve the economy of the area by providing employment or training for unemployed residents, and
Investments in nonprofit organizations combating community deterioration.
Non 501(c)(3) entities are pursuing impactful investments as well
Family offices
Impact-oriented funds (both private and public)
CDFI Lenders

8. SRI and Impact Investing in the Mezz/Sub Debt Space
Market Rate Sub Debt Features
SRI/Impact Sub Debt Potential Features
Often want $3M+ loan size
Total return: 15%-25%
Amortization required / Cash flow sweeps
Any Borrowers
Any Industries
Significant equity upside to Lender
Personal guarantees
Significant commitment, origination, and/or exit fees
May require significant Borrower’s equity already invested in business
Smaller loans
Total return: 3%-12%
Interest only
Focus on M/WBE Borrowers
Focus on environmental and social impacts
Limited or no equity to Lender
Non-recourse to principals
Limited or no fees
Limited equity required. Ability to fund much higher in capital stack

9. Greenline Ventures
NATIONAL INVESTMENT FIRM PROVIDING CAPITAL TO LOW INCOME COMMUNITIES AND SMALL BUSINESSES
10 FULL-TIME PROFESSIONALS--OVER 150 COMBINED YEARS OF EXPERIENCE
National NMTC and SMB deal origination network
Greenline Community Growth Fund (GCGF) invests proprietary capital in early stage growth firms needing $50,000 to $500,000
LEADING NMTC ALLOCATEE AND INNOVATOR
Awards total $547 million; manage over $1.5 billion of NMTC deals
First successful NMTC revolving loan fund - recycled capital over 2x
Headquarters in Denver, CO; offices in DC and Baltimore
Took company private from GMAC/Capmark in 2011
Now 100% employee-owned & minority owned/controlled
Full-service asset management and NMTC compliance
Community Development Financial Institution (CDFI)
GIIRS Gold rated, Certified B Corp., IRIS Metrics User