QSR: CapitalSpring Shares How To Navigate Capital Structures Amid Economic Challenges

Erik Herrmann, a partner at CapitalSpring who heads up the firm’s investment group, recently shared some insights with QSR Web on how businesses can effectively navigate their capital structures amid economic uncertainty. With rising costs and looming loan maturities, companies must explore flexible refinancing options and collaborate with industry-specialized investors to weather the storm.

In the current climate, traditional bank loans have become more challenging to secure due to market volatility and cautious lending practices. Higher interest rates are further straining businesses, making debt service payments harder to manage. Many companies, particularly those facing Main Street loan maturities from the COVID-19 era, are finding that increased amortization and interest rates are consuming large portions of cash flow.

To address these challenges, Herrmann suggests exploring alternative financing options beyond commercial banks. “For instance, an amortization-light structure might involve paying only 1% or even 0% of the principal each year, compared to the 7.5% to 15% typically required by traditional loans,” he wrote. “This significant reduction in principal payments can free up cash flow, allowing businesses to invest in operations and growth rather than being burdened by high debt service payments.”

Herrmann also emphasizes the value of working with industry-specialized investors. These investors provide more than financial support — they bring industry knowledge, strategic insights, and access to operational resources that can help businesses improve performance and achieve long-term growth. Whether restructuring debt or securing new capital, these partnerships offer the flexibility and support necessary to navigate economic challenges.

Read the full article here.

To find out more information on CapitalSpring, please visit https://1851franchise.com/capitalspring/info.