Going to the bank was the standard for middle-class entrepreneurs when it came to financing such as loans and credits. And this for centuries.
Larger companies afford external corporate or financial advisors, and in exceptional cases the tax advisor with his network can also help. But what does structured financing for smes look like today?? What gives structure? And how do borrowers and lenders find each other?
Definition of structured financing: what does it mean??
Entrepreneurs looking for structured financing are usually planning larger investments. This is for projects where a simple company loan or working capital loan is not enough. Whether it's real estate or an investment, people tend to rely on external advice. Many large banks have special departments that create a package for financing from the products of their bank for the customer as part of their service. You structure it by means of several financial products. This can be a loan supported by mezzanine to strengthen equity capital. In addition, there are parts of the amount covered by subsidies – and and and. The options are endless. For this reason, it is advisable to have complex financing accompanied by professionals. There is too much at stake, as the sums involved are usually very high and the structure of the financing is complex.
How does structured financing work?? Usually the consultant first takes the documents (annual financial statements for the last few years, current BWA, statement of liabilities, collateral situation, etc.).) before, and then usually (but also not always) work out structured financing based on cash flow. What does the borrower value? Are collateral available? Which lenders are suitable for financing? Does the customer exclude products or a bank? Farsightedness is required here: often it goes beyond mere investment financing. Does the capital structure need to be reorganized? Is there potential for optimization in the maturity profile? What about the shareholder structure and the interests of the various stakeholders in the planned project??
What steps does structured financing in the SME sector usually consist of?? An overview:
Consulting (independent and without intention to sell)
Preparation of a financing plan and structuring of the financing
Support in the acquisition of potential financing partners
Assistance in making offers and advice on how to make a decision
Support until signature
Follow-up if required
Leveraging digital options: structured financing in the 21. Century
This service is usually provided by corporate or special financing advisors. It is absolutely recommended that entrepreneurs seek help and advice for structured financing of investments. Above all cases, for which a simple credit is not sufficient, a structured financing with several components is meaningful. This is particularly the case for real estate financing, corporate acquisitions and project financing with high investment volumes.
In addition to the traditional analogous path to a corporate loan, real estate loan and co. There are now also digital options. Digitization in the financial world has led to the formation of platforms on which up to 250 financial providers are gathered: independent advisors are available to help companies design a financing plan and acquire financial partners through the platform.
The principle: a company states the need for structured financing and banks apply for it. Thus, in the best case, the company can choose from a variety of offers for the individually required financing for its own project. Interest rates, terms and collateral become comparable this way. The company saves time and doesn't have to hire an additional advisor – and receives the most favorable financing.
Example of digital, structured financing: online finance platform
In addition to corporate client advisors in banks, who naturally want to sell their own financial products and loans, and management consultants, who can draw on a rather small but presumably well-maintained network, online platforms such as COMPEON are an option. The benefit: expert advice is always independent, as none of the 250+ affiliated financial partners need to be favored. All partners have the same rank, it can be chosen independently and for the benefit of the customer from all products of banks and specialized lenders. Structured financing is put together in just the right way to make it the best possible option for the business. Why use one bank when you can approach multiple lenders?
COMPEON-advisory specializes primarily in large-volume financing: these include share and acquisition financings, working capital and cash flow optimizations, and also real estate projects. The combination of experienced experts, detailed advice and the use of the unique network provide companies with excellent market transparency, an efficient financing process and the best possible and favorable solution for financing.
Carry out structured financing with COMPEON? More information about financing with COMPEON finance advisory? No problem: simply inquire here free of charge and a financing consultant as your contact person will contact you for a non-binding initial meeting: