Analysing debt capacity and financing structure
- Based on your business model we develop a comprehensive financial model to assess your debt capacity and the associated risks
- We advise you with respect to the optimal debt/equity structure taking into consideration your current and expected future cash flow
- We prepare the business case for debt financing including scenarios for repaying debt in alternative future scenarios
- We assess the sources of financing and advise you on the structure of financing
Executing the financing project
- We have close contacts to debt providers and we establish a list of parties to be contacted
- We develop a presentation of the financing case
- We contact the debt providers and help you present the case
- We collect offers and assist you in the negotiation and structuring of the offer letters (LOI or head of terms)
- We coordinate due diligence and work closely with your lawyers with respect to the legal documentation
Some of the key issues you must consider
Finding the right debt/equity balance and raising debt on attractive terms is increasingly complex – key issues to consider include:
- Is your business plan and the associated financing well documented ?
- Do you have a clear view of your debt capacity when considering the projected future development of the company ?
- Are you aware of the available debt instruments and do you have a clear view of what a competitive price for each debt intrument is ?
- What is your capacity for repaying debt and what is the right debt/equity structure ?
- What security can you provide the banks and how should they think about the risks associated with your business ?
- What banks do you know and do you have a ”plan B” in a negative scenario ?
- How should you structure the ”waterfall” in an exit scenario ?
- What asset security can you provide the banks and how should they think about the risks associated with your business ?
