What is Merchant Banking or Merchant Capital

On this edition of MBTV host Randy Lennon and Keith Turner, President and CEO of Meridian Merchant Capital explore the definition of “Merchant Banking” or “Merchant Capital”. Business owners generally understand what banks do, but may be unfamiliar with the world of investment banking and merchant banking.

The term “merchant bankers” dates back to the 1700’s when established merchants helped fledgling merchants with money, advice, and other resources to grow their businesses. Back then, as today, conventional bank financing is often not enough for companies in growth mode because banks don’t really take risk. Money borrowed from banks has to be secured by assets or other guarantees which often left merchants short of resources to grow their businesses.

Today, investment and merchant banks provide access to capital and other resources and advice beyond conventional banks. Fortune 500 companies in the US and Canada can access the services of major, brand name investment banks based in New York and other major centres. Smaller companies, often the true lifeblood of the economy, look to smaller “boutique” firms in the major markets, but also in relatively smaller centres across North America.

Although Goldman Sachs or other major Wall Street firms may not be interested in deals smaller than $50 million, there is help for companies that have a $5 or $10 million transaction in mind.

To contact Keith Turner or Randy Lennon at Meridian Merchant Capital go to www.meridianmerchantcapital.com

Next week’s show: Who are the people behind MBTV and Meridian Merchant Capital?