As companies grow, standard loans and simple revolving credit facilities stop being enough. Large acquisitions, capital-intensive projects, cross-border trade flows and complex balance sheets require structures that go beyond a single bilateral loan. This is where structured finance enters the picture.
Structured finance allows businesses to pool assets, slice risk and design funding around specific cash flows or projects. Instead of relying purely on a corporate credit line, finance teams can package receivables, isolate project risk or introduce mezzanine layers that sit between senior debt and equity. The result is more flexibility in how capital is raised and how risk is shared.
This guide explains what structured finance is, how the main instruments work, when they are appropriate and how they can support a more resilient capital structure. It also sets out how Financely Group helps companies access structured solutions from global lenders, private credit funds and institutional investors.
Structured finance refers to a set of techniques and instruments that pool, repackage or tranche financial assets to create funding solutions tailored to specific needs. Instead of a single loan sitting on a balance sheet, structured finance may involve a dedicated vehicle, different layers of debt and equity, and contracts that allocate risk and return between parties.
The approach is common in:
Compared with standard loans, structured finance can:
Common goals include funding acquisitions, securing cash flow for large projects, supporting capital-intensive operations and managing exposures to interest rates, currencies or commodities.
Structured finance is a toolbox rather than a single product. The instruments below often appear in different combinations, depending on the transaction.
Securitisation converts pools of financial assets into tradable securities. A company sells receivables, loans, leases or similar assets into a special purpose vehicle (SPV). The SPV funds the purchase by issuing notes or certificates to investors. Cash from the underlying assets flows through the SPV to pay interest and principal.
For the originator, securitisation can provide:
Collateralised debt obligations bundle portfolios of loans, bonds or other debt instruments into one structure, which is then sliced into tranches with different risk and return profiles. Senior tranches receive priority payments and carry lower risk; junior tranches absorb losses and earn higher yields.
For investors, CDOs can provide tailored exposure to credit risk. For arrangers and originators, they provide a channel to distribute risk and raise capital against a broad pool of assets rather than individual loans.
Asset-backed securities are debt instruments backed by defined asset pools. These can include trade receivables, auto loans, equipment leases, credit card receivables and other contractual cash flows. ABS sit at the core of many structured funding programs.
Companies use ABS structures to:
Mezzanine financing is a hybrid instrument that sits between senior debt and equity. It typically takes the form of subordinated loans or notes with higher pricing and may include equity warrants or profit participation. In structured finance, it is often used to fill the gap between what senior lenders will provide and the total funding required for a transaction.
Mezzanine capital is common in leveraged acquisitions, growth financings and large project or real estate transactions where sponsors want to limit equity dilution.
Project finance structures are tailored around specific assets or projects, such as power plants, data centres, toll roads or large real estate developments. Funding is raised at SPV level, with lenders relying on the project’s own cash flows and security package for repayment rather than the sponsor’s full balance sheet.
These structures often feature:
Many structured finance transactions embed hedging strategies for interest rates, foreign exchange or commodity prices. Swaps, options and forwards can stabilise cash flows and protect debt service capacity.
For example, a project finance SPV with revenue in one currency and debt in another may use FX hedging to reduce currency mismatch. A company funding inventory exposures may use commodity hedges so that debt service is not derailed by price swings.
| Instrument | Core Purpose | Typical Users |
|---|---|---|
| Securitisation | Unlock liquidity from receivables or loans by issuing securities backed by those assets. | Banks, non-bank lenders, corporates with large receivables portfolios. |
| CDOs | Repackage portfolios of loans or bonds into tranches with different risk/return profiles. | Credit funds, banks, institutional investors. |
| ABS | Provide funding backed by specific asset pools such as trade or consumer receivables. | Corporates, leasing companies, finance companies. |
| Mezzanine Financing | Fill funding gaps between senior debt and equity in larger deals. | Mid-market corporates, sponsor-backed businesses, project and real estate sponsors. |
| Project Finance | Fund capital-intensive projects on a limited recourse basis relying on project cash flows. | Infrastructure, energy, real estate and industrial sponsors. |
| Derivatives and Hedging | Manage rate, FX and commodity risks tied to structured transactions. | Corporates with cross-border or commodity-linked exposures. |
Structured finance is not necessary for every business. It becomes relevant when size, complexity or risk cannot be handled by plain term loans alone. Situations where structured solutions tend to add value include:
Structured finance allows funding to be shaped around specific assets, projects or cash flows. Instead of a single loan with standard terms, companies can combine instruments that match their revenue timing, collateral profile and strategic objectives.
By separating pools of assets in an SPV or tranching risk between different investors, structured transactions can contain potential losses and reduce contagion to the wider group. Derivatives and hedging embedded in the structure help manage interest rate, FX and commodity exposures.
Structured finance opens doors to capital sources that may not participate in simple bilateral loans, such as ABS investors, infrastructure funds, insurance companies and dedicated credit funds. This can increase the total capacity available for large or long-dated projects.
Repayment profiles can be shaped to match cash flows from projects or asset pools. For example, project finance loans can be sculpted to expected net cash flows, while securitisation structures pass through collections from receivables. This alignment supports debt service even in capital-heavy environments.
Thoughtful use of structured finance allows CFOs to separate funding for different business lines, monetise assets without outright sale and manage leverage more precisely. Over time, this can support better credit profiles, more resilient liquidity and clearer communication with investors and lenders.
Structured finance is most relevant for organisations with scale, recurring cash flows and identifiable asset pools. Examples include:
Designing and placing a structured transaction involves more than drafting a term sheet. Companies must understand which lenders and investors are active in their segment, how risk will be viewed by credit committees and what information is needed to move from interest to execution.
Financely Group works with businesses that need structured solutions for trade, projects and corporate transactions. Through regulated partners, we provide access to:
Our role covers:
Structured finance can support flexible, large-scale and risk-aware capital solutions when conventional loans are not enough. It is most effective when companies identify early which assets, projects or flows could sit in dedicated structures, rather than trying to retrofit a structure around last-minute funding gaps.
Financely Group can review your business, projects and transaction pipeline to identify where structured approaches may add value. From there, we help align structures with lender and investor appetite and build an execution path that is realistic on timing and conditions.
Share your transaction outline, asset base and funding requirements with our team to explore structured finance options with global lenders, private credit funds and institutional investors.
Submit Your Structured Finance BriefDisclaimer: This page is for general information only and does not constitute legal, tax, accounting or investment advice. Financely Group acts as advisor and arranger through regulated partners and is not a bank or direct lender. Any structured finance, loan, security or capital raising structure is subject to underwriting, KYC, AML, sanctions screening, legal review, documentation, perfected security and approvals by relevant stakeholders. No public offer or solicitation is made on this page.
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