Merchants Capital follows a disciplined approach, investing in small middle-market companies with recurring revenues. We seek seasoned and expansion-stage growth companies with positive cash flow that are run by solid, experienced management teams. We invest in business models that have market protection or a structural barrier to entry. For example:

• A license
• A franchise
• Long term contracts
• Dominant market share in a niche industry

We typically invest $3 - $4 million per transaction, but have the capability to assemble and lead a group of investors in substantially larger equity investments. As an example, in one of our transactions, Merchants Capital brought in a co-investor that invested $38 million side by side with us.

Merchants Capital is careful to structure transactions so that the interests of management and the interests of Merchants Capital are perfectly aligned. We avoid auctions, preferring negotiated transactions. We prefer to control our investments, but can be a non-control investor as well. As a non-control investor we require board representation and protective rights. We target an exit within three to five years, which will generally occur through a sale or recapitalization.

Merchants Capital believes that strong business relationships are built on a foundation of trust. We pride ourselves on conducting our business according to the highest ethical standards and we demand that management teams do the same.