---
title: "Navigating Capital Structures Amid Economic Challenges"
url: https://burnaze.com/article/b0653dc8-359e-42eb-8703-de143b9afee8
source: "1851 Franchise"
original_url: https://1851franchise.com/capitalspring/qsr-capitalspring-shares-how-to-navigate-capital-structures-amid-economic-challenges-2727589
category: "Finance"
topics: ["Finance & M&A"]
published: 2024-10-09T17:12:55.000Z
modified: 2026-11-01T01:04:48.944Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/170e2aac6547e5d5fa245276c5f7454f6423.jpg
---

# Navigating Capital Structures Amid Economic Challenges

**TL;DR:** Erik Herrmann, a partner at CapitalSpring, shared insights on navigating capital structures amid economic challenges, including flexible refinancing options and industry-specialized investors. Companies can explore alternative financing options beyond commercial banks to address challenges such as rising costs and looming loan maturities.

*originally published in 1851 Franchise on 2024-10-09. [Read the original](https://1851franchise.com/capitalspring/qsr-capitalspring-shares-how-to-navigate-capital-structures-amid-economic-challenges-2727589).*

## Story

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.

## Entities

- 1851 Franchise (publication)
- Finance (sector)
- QSR Web (publication)
- Capital Spring (investor)
- Erik Herrmann (person)
- economic challenges (topic)
- capital structure (topic)
- refinancing options (topic)
- industry-specialized investors (topic)

---
Originally reported by 1851 Franchise (https://1851franchise.com/capitalspring/qsr-capitalspring-shares-how-to-navigate-capital-structures-amid-economic-challenges-2727589). Summarized by Burnaze (https://burnaze.com/article/b0653dc8-359e-42eb-8703-de143b9afee8).